Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent?
i.lowering the ceiling
ii.dedicating more resources to enforcement of the ceiling
iii.raising the ceiling
A) i only
B) ii only
C) iii only
D) i and ii
E) ii and iii

Question

Quizplus · Accepted Answer

iii. Raising the ceiling reduces the gap between the controlled price and the market equilibrium price, thereby reducing the deadweight loss associated with the rent ceiling. Lowering the ceiling or dedicating more resources to enforcement would not reduce the deadweight loss; in fact, lowering the ceiling would increase it.

Which of the Following Decrease the Deadweight Loss from a Rent