In a housing market with a rent ceiling set below the equilibrium rent,as time passes the supply of apartments
A) decreases.
B) increases.
C) does not change.
D) becomes fixed by the government.
E) increases while the demand for apartments decreases.

Question

Quizplus · Accepted Answer

With a rent ceiling set below the equilibrium rent, landlords are not willing to supply as many apartments as they would at the market price since they cannot earn as much profit. As time passes, landlords may reduce the number of apartments they are willing to rent out due to maintenance and repair costs, leading to a decrease in the supply of apartments.

In a Housing Market with a Rent Ceiling Set Below