Question

When cities prevent landlords from charging market rents, which of the following are common long-run outcomes? Check all that apply. a. The quality of rental housing units falls. b. Landlords earn lower profits from renting housing units, but the rent charged has no effect on either the quantity or quality of rental units. c. The quantity of available rental housing units falls. d. The future supply of rental housing units increases.

Answer 1

Answer:

a. The quality of rental housing units falls

c. The quantity of available rental housing units falls.

Explanation:

As the landlord cannot receive a desired return for their investment they will stop improving and doing proper maintenance of the property to obtain it.

They will also be less likely to rent and would prefer to sale and move away from the real-state investment business in the region to more profitable region or better business. This will make the ernt go up as there is less offer as well so the policy backfires.

Stoping the market to work property will cause market failures and the outcome won't be the desired