Rent controls usually set a price ceiling below the equilibrium price,and therefore:
A)quantity supplied exceeds the quantity demanded.
B)quantity demanded exceeds the quantity supplied.
C)a surplus of rental units will result.
D)all low-income recipients will clearly be helped.

Question

Quizplus · Accepted Answer

When rent controls are implemented and a price ceiling is set below the equilibrium price, the quantity demanded exceeds the quantity supplied. This creates a shortage of available rental units, as landlords may no longer find it profitable to rent out their properties at the reduced price. Low-income recipients may benefit in the short term from the lower rent prices, but in the long term, the shortage of rental units can lead to increased competition and higher prices as demand exceeds supply.

Rent Controls Usually Set a Price Ceiling Below the Equilibrium