Under rent controls:
A) some mutually profitable trades are illegal and therefore the benefits are never realized.
B) producer surplus is zero.
C) the quantity demanded of apartments is typically less than the quantity supplied.
D) buyers are better off at the expense of sellers.

Question

Quizplus · Accepted Answer

Rent controls create a situation in which some landlords are unable to increase prices to match demand and supply, leading to a shortage of housing. As a result, some tenants may be unable to find an apartment to rent, even though they are willing to pay the market price. This means that mutually beneficial trades, in which renters are willing to pay more than landlords are legally allowed to charge, are prohibited.

Under Rent Controls