Question

Economists generally recognize that rent controls cause shortages in housing, yet rent controls tend to persist. Why does this occur? a. Many people do not understand the effects that controls cause. b. Property owners are politically unpopular. c. Many persons tend to benefit from rent controls. d. All of the above are correct.

Answer 1

Answer:

D) All of the above are correct

Explanation:

Many people indeed do not know that price controls produce shortages, and we do not only refer to the general public, but also many politicians, who are ignorant of economic theory.

Property owners are politically unpopular because they are frequently perceived as being more priviliged and not paying their fair share. Populist politicans can use them as scapegoats to rile up support.

Many people benefit from rent controls, from owners colluding to the government, to real estate cartels, to tenants, or the government itself it it holds public housing.