What would happen in the market for rental housing in your community if the local government legally mandated rents that were below the market clearing price?
A) There would be a surplus of rental housing.
B) There would be a shortage of rental housing.
C) The demand for rental housing would increase.
D) The supply of rental housing would decrease.

Question

Quizplus · Accepted Answer

If the local government legally mandates rents that are below the market clearing price, landlords would be less willing to supply rental housing as they would not be able to make as much profit. This would result in a decrease in the supply of rental housing, leading to a shortage. Additionally, demand for rental housing may increase as more people would be able to afford it at the lower price, further exacerbating the shortage.

What Would Happen in the Market for Rental Housing in Your