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Figure: Rent Controls
-(Figure: Rent Controls) Look at the figure Rent Controls. Suppose that rent controls are imposed. If the government wanted a rent control ceiling to be effective immediately, what is one possible price to set?

Question

Use the following to answer questions:
Figure: Rent Controls

-(Figure: Rent Controls) Look at the figure Rent Controls. Suppose that rent controls are imposed. If the government wanted a rent control ceiling to be effective immediately, what is one possible price to set?

Quizplus · Accepted Answer

To be effective, a rent control ceiling must be set below the equilibrium rent. Rent₁ is below the equilibrium rent, making it an effective price ceiling.

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