Which is a correct statement about a rent control law?
A) A rent control law is a price floor law that makes apartments cheaper to rent but discourages property owners from renting out apartments.
B) A rent control law encourages property owners to convert offices and condos into apartments.
C) A rent control law reduces housing shortages.
D) A rent control law encourages landlords to rent out apartments.
E) A rent control law is a price ceiling law that makes apartments cheaper to rent but discourages property owners from renting out apartments.

Question

Quizplus · Accepted Answer

A rent control law sets a legal limit on how much landlords can charge for rent, which is a price ceiling. This makes apartments cheaper to rent for tenants, but it often discourages property owners from renting out apartments because they cannot make as much profit. As a result, rent control laws can create housing shortages and reduce the overall supply of apartments available to rent. Therefore, option E is the correct statement.Option A is incorrect because rent control laws are not price floor laws. Option B is incorrect because rent control laws do not encourage property owners to convert offices and condos into apartments. Option C is incorrect because rent control laws can actually exacerbate housing shortages by discouraging landlords from renting out apartments. Option D is incorrect because rent control laws can discourage landlords from renting out apartments, not encourage them.

Which Is a Correct Statement About a Rent Control Law