Suppose the government imposes rent control (a price ceiling) below the equilibrium price for rental housing. Which of the following could result?

Question

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All of the above could result from imposing rent control below the equilibrium price. If the rent control law is broken, tenants risk legal penalties. Landlords might cut back on maintenance and renovations if they cannot earn enough profit to cover the costs, which could lead to a deterioration in the quality of existing rental housing. Additionally, shortages can occur because the lower price encourages an increase in demand for rental housing, while the supply of rental housing decreases as landlords exit the market.

Suppose the Government Imposes Rent Control (A Price Ceiling) Below