If the government sets out to help low-income people by establishing a maximum amount for rent:
A) a price floor has been set and a shortage of rental units may occur.
B) a price ceiling has been set and a shortage of rental units may occur.
C) in the long run more rental units will appear.
D) poor people will definitely be helped.

Question

Quizplus · Accepted Answer

If the government establishes a maximum amount for rent, it has set a price ceiling. This can lead to a shortage of rental units because landlords may not want to rent out their units for less than their market value. As a result, some landlords may exit the market, and fewer rental units may be available for low-income people.

If the Government Sets Out to Help Low-Income People by Establishing