A ceiling price set in the policy of rent controls:
A) will be set at a price above the equilibrium price.
B) may result in some people who rent out units to leave the business because they cannot cover costs.
C) will lead to rental units being higher in quality because landlords are guaranteed a high price.
D) will create a surplus of housing.

Question

Quizplus · Accepted Answer

Setting a ceiling price below the equilibrium price can cause a shortage of rental units as demand exceeds supply. This can cause landlords to leave the business if they cannot cover their costs, leading to a decrease in the quantity and quality of rental housing available.

A Ceiling Price Set in the Policy of Rent Controls