In an unregulated housing market with no rent ceiling,
A)marginal social cost is greater than marginal social benefit.
B)marginal social benefit is greater than marginal social cost.
C)marginal social benefit equals marginal social cost.
D)marginal social benefit is negative.
E)marginal social cost is negative.

Question

Quizplus · Accepted Answer

In an unregulated housing market with no rent ceiling, the market tends to reach an equilibrium where the quantity supplied equals the quantity demanded. At this equilibrium, the marginal social benefit (the additional benefit to society from consuming one more unit of a good) equals the marginal social cost (the additional cost to society of producing one more unit of the good), reflecting an efficient allocation of resources.

In an Unregulated Housing Market with No Rent Ceiling