Which of the following policies maintains maximum economic surplus in the housing market while assisting the poor with their housing needs?
A) A price floor.
B) A price ceiling.
C) A free market with subsidies to landlords.
D) A free market with subsidies to the poor.
E) Subsidized moving expenses for the poor.

Question

Quizplus · Accepted Answer

A free market with subsidies to the poor would maintain maximum economic surplus by allowing supply and demand to determine the market price, while also assisting the poor with their housing needs through government subsidies. A price floor would decrease economic surplus by reducing the quantity of housing units supplied, while a price ceiling would decrease economic surplus by creating a shortage of housing units demanded. Subsidizing landlords would not necessarily incentivize them to provide affordable housing, and subsidized moving expenses for the poor would not address the root problem of inadequate affordable housing in the market.

Which of the Following Policies Maintains Maximum Economic Surplus in the Housing