If government sets a ceiling on rent that is below the market equilibrium rent, the result will be
A) greater profits for landlords
B) an increase in the quantity supplied of apartments
C) a surplus of apartments
D) a shortage of apartments

Question

Quizplus · Accepted Answer

When a government sets a rent ceiling below the market equilibrium, it causes the price to be artificially lower than what the market would naturally dictate. This lower price increases the demand for apartments while discouraging landlords from offering apartments for rent, leading to a shortage of available apartments.

If Government Sets a Ceiling on Rent That Is Below