New York City has been experiencing a housing emergency for quite some time. Apartments are difficult to come by. In fact, the vacancy rate has been below 5 percent since World War II. The most likely cause of the housing emergency is:
A) a price floor on rent higher than equilibrium price.
B) a price ceiling on rent lower than equilibrium price.
C) too high incomes in New York City.
D) a lack of a rationing mechanism to distribute existing apartments.

Question

Quizplus · Accepted Answer

A price ceiling on rent lower than the equilibrium price leads to a shortage because it makes renting less profitable for landlords, reducing the supply of available apartments.

New York City Has Been Experiencing a Housing Emergency for Quite