If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?
A) reduced search activity
B) black market activity
C) a building boom
D) a housing surplus
E) None of the above answers is correct because to have an impact, the rent ceiling must be above the equilibrium rent.

Question

Quizplus · Accepted Answer

When a rent ceiling is imposed that is less than the equilibrium rent, landlords cannot legally charge the market price which creates a shortage of rental units. This leads to a black-market activity where landlords and tenants make illegal agreements to rent units at a price above the ceiling.

If a Rent Ceiling Is Imposed That Is Less Than