Question

Rent control is an example of a _____________________. it sets the price of rent __________________ the equilibrium price and results in a ______________ of apartments.
a. price floor, above, surplus
b. price ceiling, above, surplus
c. price floor, below, shortage
d. price ceiling, below, shortage

Answer 1

Rent control is an example of a "price ceiling", it sets the price of rent "below" the equilibrium price and results in a "shortage" of apartments.

Answer is "D".

Rent control is a type of value control that confines the sum a property proprietor can charge for leasing a home or other land. Rent control goes about as a price ceiling by keeping rents either from being charged over a specific level or from expanding at a rate higher than a predetermined percentage.