In a housing market with a rent ceiling below the equilibrium rent,apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?
A) In the market with the rent ceiling, renters are searching for the best buy in apartments.
B) In the market with the rent ceiling, there is a wide variety in the quality of apartments for rent.
C) In the market with the rent ceiling, the quantity of housing demanded is greater than quantity supplied at the ceiling price.
D) The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment.
E) The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling.

Question

Quizplus · Accepted Answer

In a market with a rent ceiling below the equilibrium rent, the quantity of housing demanded exceeds the quantity supplied at the ceiling price. This leads to a shortage of apartments, which in turn increases the search time for apartment seekers. Since the quantity of housing demanded is greater than the quantity supplied at the ceiling price, there is an excess demand for rental housing which forces apartment seekers to spend more time searching for an apartment. Option A and B may be true, but they do not directly explain the difference in search time between the two markets. Option D and E are incorrect because they contradict the premise of the question.

In a Housing Market with a Rent Ceiling Below the Equilibrium