What are the effects of a rent ceiling that is set below the equilibrium rent?
What will be an ideal response?
If the rent ceiling is set below the equilibrium rent, the quantity of housing units demanded by renters exceeds the quantity supplied by landlords. Since landlords are not forced to supply more units than the supply curve would indicate for the rent ceiling price, the quantity of housing units actually rented equals the quantity supplied, rather than the quantity demanded. This causes a shortage in the rental housing market.
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If the multiplier is 10, the marginal propensity to consume must be 0.1
Indicate whether the statement is true or false
Scarcity:
a. ensures that people become satisfied with less than what they want. b. exists only during a recession. c. exists only in some countries. d. affects only poor people. e. requires people to make choices to satisfy their wants.
If the economy is producing a combination of goods inside its production possibilities frontier, then
a. workers are on vacation b. a significant number of workers have little education c. some resources are being wasted d. technology must improve before output can increase e. the opportunity cost of producing more output is greater than the value of the additional output that could be produced
School vouchers are
A. provided by the government. B. provided by private organizations. C. public funds to be used for private tuition. D. all of these answer options are correct.