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22 June, 13:16

A binding price ceiling on apartments (effective rent control) will:

(A) increase the quantity supplied of rental housing.

(B) decrease the quantity demanded of rental housing.

(C) create a greater quantity supplied of rental housing to be made available to renters.

(D) cause the quantity demanded to exceed the quantity supplied of rental housing.

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  1. 22 June, 13:29
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    D) cause the quantity demanded to exceed the quantity supplied of rental housing.

    Explanation:

    A price ceiling is a binding government regulation in which it puts a cap on the price landlords can charge tenants to rent their properties. If this happens, there could be a rapid significant increase in the demand of apartments. This would lead to excess demand that the existing supply cannot meet, creating a shortage. The property owners may also choose to not rent their apartment at that lower price driving the supply even lower.
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