With a rent ceiling set below the equilibrium rent,
i.all renters are able to rent apartments at a lower rent.
ii.there is a shortage of apartments.
iii.the quantity of apartments supplied does not change because buildings cannot be moved.
A) i only
B) ii only
C) iii only
D) ii and iii
E) i, ii, and iii

Question

Quizplus · Accepted Answer

A rent ceiling below the equilibrium rent creates a shortage because the quantity demanded exceeds the quantity supplied. The supply of apartments is fixed in the short term, so the quantity supplied does not change immediately. However, not all renters can rent at the lower price due to the shortage.

With a Rent Ceiling Set Below the Equilibrium Rent