-In the figure above, the demand curve shifts rightward from D₀ to D₁ so that D₁ is the relevant demand curve. Suppose the government imposes a rent ceiling of $300 per month. In the short run there will be

Question

-In the figure above, the demand curve shifts rightward from D<sub>0</sub> to D<sub>1</sub> so that D<sub>1</sub> is the relevant demand curve. Suppose the government imposes a rent ceiling of $300 per month. In the short run there will be A) a deadweight loss created. B) a reduction in renters' search activities. C) an elimination of a black market. D) an increased number apartments rented.

Quizplus · Accepted Answer

A rent ceiling below the equilibrium price creates a shortage, which in turn creates a deadweight loss.

-In the Figure Above, the Demand Curve Shifts Rightward from D0

-In the Figure Above, the Demand Curve Shifts Rightward from D₀