Assuming that the long- run supply of housing is more _ than the short- run supply, the imposition of binding rent controls will generally .

Question

Quizplus · Accepted Answer

In general, the long-run supply of housing is relatively elastic because developers will respond to higher prices by building more housing over time. However, in the short run, there may be limited options for increasing the supply, which would make the short-run supply relatively inelastic. If binding rent controls are imposed, the short-run supply of rental housing may not be able to respond quickly enough, leading to a shortage. Over time, the shortage may become worse as landlords have less incentive to maintain or improve their properties due to the rent controls. Therefore, choice C is the best answer.

Assuming That the Long- Run Supply of Housing Is More