In an unregulated housing market with no rent ceiling,
A)scarce housing resources are allocated inefficiently.
B)scarce housing resources are allocated efficiently.
C)tenants pay a lower rent compared to what they pay in a market with an effective rent ceiling.
D)landlords receive less compared to what they receive in a market with an effective rent ceiling.
E)consumer surplus equals producer surplus.

Question

Quizplus · Accepted Answer

In an unregulated housing market with no rent ceiling, prices are determined by supply and demand, leading to an efficient allocation of scarce housing resources. Prices adjust to equate the quantity supplied with the quantity demanded, ensuring that those who value the housing the most (and are willing to pay for it) are the ones who obtain it.

In an Unregulated Housing Market with No Rent Ceiling