What are the effects of a rent ceiling set below the equilibrium rent?
What will be an ideal response?
A rent ceiling is the maximum legal rent. If the rent ceiling is set below the equilibrium rent, the rent ceiling creates a shortage of apartments. Consumer and producer surplus are both reduced. Hopeful renters face must engage in increased search activity. In order to rent an apartment, renters and landlords might engage in black market activity that effectively raises the rent.
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The slope of a straight line
A) is the same at all points along that line. B) cannot be defined. C) changes from one point to the next on that line. D) is always equal to zero.
If Country A has an absolute advantage over Country B in the production of every commodity,
a. mutual gains from trade between Country A and Country B would be impossible. b. Country B would be able to gain from trade but not country A. c. the joint output of the two countries could not be increased through specialization and exchange. d. mutual gains from trade would still be possible.