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-In the Figure Above, Originally the Apartment Rental Market Is

Question 51

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 an inferior 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.
-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 an inferior 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.

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