One of the consequences of a rent ceiling set below the equilibrium rent is
A) decreased search activity.
B) the establishment of landlord unions.
C) increased search activity.
D) surpluses of apartments.
E) the elimination of the deadweight loss that would otherwise exist in the housing market.

Question

Quizplus · Accepted Answer

When a rent ceiling is set below the equilibrium rent, it creates a shortage of apartments because the price is artificially kept lower than what the market would naturally determine. This leads to increased search activity as more people are competing for fewer available apartments.

One of the Consequences of a Rent Ceiling Set Below