If the government imposes binding rent control:
A)rent will be set above the equilibrium price.
B)it may result in some landlords leaving the business because they cannot cover costs.
C)it will lead to rental units being higher in quality because landlords are guaranteed a high price.
D)it will cause a surplus of housing.

Question

Quizplus · Accepted Answer

Rent control can lead to landlords being unable to cover the costs of their properties, resulting in some leaving the business. This can reduce the supply of rental units and ultimately make the housing shortage worse. Rent control does not guarantee high-quality housing or cause a surplus of housing. Rent is likely to be set below the equilibrium price, not above it.

If the Government Imposes Binding Rent Control