Which is the MOST correct statement about the impact of rent controls?
A) The short-run supply curve for apartments is inelastic, so rent controls create larger shortages in the short run than in the long run.
B) The short-run supply curve for apartments is inelastic, so rent controls create smaller shortages in the short run than in the long run.
C) The long-run supply curve for apartments is inelastic, so rent controls create larger shortages in the long run than in the short run.
D) The long-run supply curve for apartments is inelastic, so rent controls create smaller shortages in the long run than in the short run.

Question

Quizplus · Accepted Answer

In the short run, the supply of apartments is inelastic, so rent controls create smaller shortages. Over time, as supply becomes more elastic, shortages tend to increase.

Which Is the MOST Correct Statement About the Impact of Rent