In a housing market with a rent ceiling below the equilibrium rent, apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling. Why does this difference exist?
A) The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment.
B) The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling.
C) In the market with the rent ceiling, the quantity of housing demanded is greater than quantity supplied at the ceiling price.
D) In the market with the rent ceiling, there is a wide variety in the quality of apartments for rent.
E) In the market with the rent ceiling, renters are searching for the best buy in apartments.

Question

Quizplus · Accepted Answer

With a rent ceiling below the equilibrium rent, the quantity of housing demanded is greater than quantity supplied at the ceiling price. This leads to a shortage of available apartments and competition among apartment seekers, causing them to spend more time searching for an apartment that meets their needs and budget. This is in contrast to a market without a rent ceiling, where supply and demand are determined by the market forces, leading to a quicker and more efficient search process.

In a Housing Market with a Rent Ceiling Below the Equilibrium