One strategy someone might use to be elected mayor of a university town is to place a binding price ceiling on rent for student apartments.What will happen if he or she gets elected and is able to pass such a law?
A) The price ceiling will increase the number of apartments available for rent.
B) The price ceiling will cause the demand curve to shift.
C) The price ceiling will cause the supply curve to shift.
D) The price ceiling will decrease the number of students who want to rent an apartment.
E) The price ceiling will cause students to sleep in their cars or to move in with their friends because they won't be able to find places to live.

Question

Quizplus · Accepted Answer

Placing a binding price ceiling on rent for student apartments will likely cause a decrease in the supply of apartments available since landlords may not find it profitable to rent out their apartments at a lower price. This will lead to a shortage of apartments, causing students to either sleep in their cars or move in with their friends, leading to overcrowding. This will create more problems than solutions.

One Strategy Someone Might Use to Be Elected Mayor of a University