Which of the following is the most likely result of a rent control law that creates a binding price ceiling? A) The quality of rental homes will increase. B) A surplus of rentable homes C) All people will be able to rent a home. D) A shortage of rentable homes

Which of the following is the most likely result of a rent control law that creates a binding price ceiling? A) The quality of rental homes will increase. B) A surplus of rentable homes C) All people will be able to rent a home. D) A shortage of rentable homes

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter4: Markets In Action

Section: Chapter Questions

Problem 3SQ

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Question

Which of the following is the most likely result of a rent control law that creates a binding price ceiling?

A) The quality of rental homes will increase.

B) A surplus of rentable homes

C) All people will be able to rent a home.

D) A shortage of rentable homes

Video Definition Video Definition Government regulation setting a maximum price a business may charge for a given good or service. A price ceiling itself does not cause demand or supply to change. It is simply a mechanism used to set a price that can be legally charged in the market. Price ceilings are often implemented during times of crisis to avoid price gouging.

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