Question

A rent control law, where tenants pay below-market rents, is a market restriction that may induce a decrease in the supply of rented apartments.

Answer 1

The statement above is TRUE. This is because, when the price of a commodity is set below the equilibrium price, the quantity demanded will exceed the quantity supplied. The rent control is meant to favour the consumers and because the price is now lower, the consumers will demand more while the supplier will supply less because their profits have been negatively affected.