If the supply curve for housing has the normal positive slope, rent controls will likely
A)increase the amount of housing.
B)improve the quality of housing.
C)aggravate the housing shortage.
D)help low-income families find suitable housing.
E)increase the demand for housing.

Question

Quizplus · Accepted Answer

Rent controls will make renting an attractive option for tenants which will lead to an increase in demand. With the normal positive slope of supply curve, this will lead to a shortage of available housing since the quantity demanded will exceed the quantity supplied. Landlords will also have less incentive to maintain or improve the quality of the housing since they may not be able to charge higher rents to offset the costs. Overall, rent controls will aggravate the housing shortage.

If the Supply Curve for Housing Has the Normal Positive