The government imposes a maximum price on apartments that is ABOVE the equilibrium price. You accurately predict that
A) the law will have no economic impact.
B) the law will create a surplus of apartments.
C) renters will find that landlords start offering to furnish the apartments.
D) landlords are less likely to do routine maintenance work in the apartments.

Question

Quizplus · Accepted Answer

A maximum price set above the equilibrium price is non-binding, meaning it does not affect the market since the market price is already lower than the imposed maximum.

The Government Imposes a Maximum Price on Apartments That Is