The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month.
-In the figure above,with the rent ceiling
A) there is a shortage of 3,000 units.
B) there is a surplus of 3,000 units.
C) there is a surplus of 2,000 units.
D) there is a shortage of 1,000 units.
E) the market is in equilibrium.

Question

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month.
-In the figure above,with the rent ceiling
A) there is a shortage of 3,000 units. 
B) there is a surplus of 3,000 units. 
C) there is a surplus of 2,000 units. 
D) there is a shortage of 1,000 units. 
E) the market is in equilibrium.

Quizplus · Accepted Answer

A rent ceiling set below the equilibrium price typically creates a shortage because the quantity demanded exceeds the quantity supplied at that price point, leading to a situation where more people want to rent apartments than there are apartments available.

The Figure Above Shows the Supply and Demand Curves in the Market