Assume that there is rent control in Chicago.Which of the following is true?

Question

Quizplus · Accepted Answer

Rent control creates a price ceiling, meaning that landlords cannot charge above a certain amount. This may make housing more affordable for some consumers, but it also creates a shortage of apartments because landlords cannot make a profit at the lower prices. This shortage creates inefficiencies and reduces the total surplus in the market. Therefore, option A and D are incorrect. Option C may be true if consumer surplus increases, but it does not necessarily lead to an increase in total surplus.

Assume That There Is Rent Control in Chicago