Figure 6-5

-Refer to Figure 6-5.Which panel best represents a binding rent control in the short run

Question

Figure 6-5

-Refer to Figure 6-5.Which panel best represents a binding rent control in the short run

Quizplus · Accepted Answer

A binding rent control in the short run is represented by a situation where the rent ceiling is below the equilibrium rent. This is because at a rent ceiling below the equilibrium rent, there is a shortage of housing units, as landlords are unwilling to supply housing units at the lower rent. This is represented by panel (a), where the rent ceiling is below the equilibrium rent, and there is a shortage of housing units.

Figure 6-5 -Refer to Figure 6-5.Which Panel Best Represents a Binding Rent