Multiple Choice
-In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month, which causes a shortage. Suppose that apartments are a normal good and incomes rise. The increase in income
A) decreases the shortage.
B) has no effect on the shortage.
C) increases the shortage.
D) raises the rent.
Correct Answer:
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