If a rent ceiling is set ________ the equilibrium price,the effect can result in a housing ________.
A) below; surplus
B) below; shortage
C) above; shortage
D) above; surplus
E) equal to; surplus

Question

Quizplus · Accepted Answer

A rent ceiling is a legal maximum on the amount of rent that landlords can charge for their rental properties. If the rent ceiling is set below the equilibrium price, which is the price where quantity demanded equals quantity supplied, there will be a shortage of rental properties. This is because the quantity demanded will exceed the quantity supplied at the lower rent price. Therefore, the best choice is B.

If a Rent Ceiling Is Set ________ the Equilibrium Price,the