Suppose the government imposes a ceiling price on apartment rents.Which of the following is unlikely be observed?

Question

Quizplus · Accepted Answer

Imposing a ceiling price on apartment rents will likely result in a decreased incentive for developers to build new apartment complexes, as their potential profits may be limited. Therefore, an increase in the number of new apartment complexes being built is unlikely to be observed. Choice B may be observed if demand for apartments exceeds supply, which is possible if the ceiling price is set too low. Choice C is possible if landlords are unable to cover the costs of maintenance under the ceiling price. Choice D is possible if landlords choose to convert their apartment complexes to condos, as they may be able to earn a higher profit through individual sales.

Suppose the Government Imposes a Ceiling Price on Apartment Rents