A rent ceiling below the equilibrium rent
A) increases the quantity of housing supplied.
B) is an example of a price floor.
C) has no effect on the housing market because the ceiling is below the equilibrium.
D) can create a black market.
E) limits search because people need no longer search for cheap apartments.

Question

Quizplus · Accepted Answer

When a rent ceiling is below the equilibrium rent, it creates a shortage of rental housing. Landlords are not willing to supply as much housing at a lower price. This can create a black market where landlords rent out units above the ceiling price illegally.

A Rent Ceiling Below the Equilibrium Rent