-A rent ceiling on housing creates a problem of allocating the available housing units because
A) it eliminates search, which is one of the major ways housing units are allocated.
B) the supply of housing increases and the supply curve shifts rightward.
C) a surplus of apartments occurs.
D) the demand for housing decreases and the demand curve shifts leftward.
E) a shortage of apartments occurs.

Question

-A rent ceiling on housing creates a problem of allocating the available housing units because
A) it eliminates search, which is one of the major ways housing units are allocated. 
B) the supply of housing increases and the supply curve shifts rightward. 
C) a surplus of apartments occurs. 
D) the demand for housing decreases and the demand curve shifts leftward. 
E) a shortage of apartments occurs.

Quizplus · Accepted Answer

A rent ceiling set below the equilibrium price results in a shortage of apartments because the price is too low to clear the market. At this artificially low price, the quantity demanded exceeds the quantity supplied, leading to a shortage.

-A Rent Ceiling on Housing Creates a Problem of Allocating