In order to control the rising price of housing, the city council enacts rent controls. This mandated price is below the equilibrium price. Consequently, a shortage of housing may result.

Question

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Rent controls set the price below the equilibrium price, which can lead to a decrease in the quantity of housing supplied and an increase in the quantity of housing demanded. This creates a housing shortage as demand exceeds supply at the artificially low price.

In Order to Control the Rising Price of Housing, the City