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30 April, 04:40

An example of a binding price ceiling is: a. a minimum wage law that is set above the equilibrium price. b. a minimum wage law that is set below the equilibrium price. c. rent control that is set above the equilibrium price. d. a black market that sets the price below the equilibrium price. e. rent control that is set below the equilibrium price.

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  1. 30 April, 04:48
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    e. rent control that is set below the equilibrium price.

    Explanation:

    The law binds, ties, it forces the market to make trnasaction on this price.

    The owners of the houses and building for rent would rent at a higher price than the stablished by the goverment.

    This control force them to ggive a lower rent than they think is the right one for granting the right of use of his property.

    As the housing market demand is quite inelastic and people need a place to live they cannot respond to price increase with a lower house demand. At most, they can move to low-income zone when the rent is more affordable.

    The government is doing this control with the idea of ensure the families well-being to don't pay exorbitant prices in the housing market
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