Rent control applies to about two-thirds of the private rental housing in New York City. Economic theory suggests that the below-equilibrium prices established by rent controls would
A) create a surplus of rental housing.
B) promote a rapid increase in the future supply of housing.
C) result in poor service and quality deterioration of many rental units.
D) lead to a reduction in housing discrimination against minorities.

Question

Quizplus · Accepted Answer

Rent control sets prices below the equilibrium, leading to reduced incentives for landlords to maintain properties, resulting in poor service and quality deterioration.

Rent Control Applies to About Two-Thirds of the Private Rental