Exhibit 4-6
-As shown in Exhibit 4-6, when a government sets a rent ceiling at $750 per month, the result is a(n)

Question

Exhibit 4-6  
-As shown in Exhibit 4-6, when a government sets a rent ceiling at $750 per month, the result is a(n)

Quizplus · Accepted Answer

When the government sets a rent ceiling below the market equilibrium price, the result is a shortage of rental units. In this case, the rent ceiling is below the equilibrium price, which means that demand exceeds supply. As a result, some potential renters will not be able to find a place to live, and landlords may have to resort to other methods, such as offering units under the table or turning away renters who cannot pay higher rents.