In the housing market, rents serve the purpose of
A) making landlords rich.
B) rationing the availability of existing housing.
C) providing an entry by the government into the housing market.
D) increasing tax collections by the community.

Question

Quizplus · Accepted Answer

Rents serve the purpose of rationing the availability of existing housing. When there is high demand for housing, landlords can increase rent prices to allocate the available housing to those who are willing and able to pay the highest prices. This can also incentivize landlords to invest in building new housing units or renovating existing ones to increase the supply, ultimately leading to more availability and lower prices in the long term. Rents do not necessarily make landlords rich or provide an entry by the government into the housing market, and tax collections may be affected by rents but are not their primary purpose.

In the Housing Market, Rents Serve the Purpose of