If the government imposes a maximum rent for housing that is above the equilibrium rent,then the
A)law will have no effect in the rental market.
B)law will generate a shortage of housing.
C)law will create a surplus of housing.
D)demand curve for housing shifts rightward.
E)supply curve of housing shifts leftward.

Question

Quizplus · Accepted Answer

When a maximum rent is set above the equilibrium rent, it does not interfere with the market's natural setting of rent prices. Therefore, landlords and tenants will continue to operate as if there were no rent control, leading to no effect in the rental market.

If the Government Imposes a Maximum Rent for Housing That