Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is...

Rent controls force landlords to price apartments below the equilibrium price level. An immediate effect is a shortage (excess demand) of apartments, because the quantity of apartments demanded is greater than the quantity supplied at the regulated price.

When cities prevent landlords from charging market rents, which of the following are common long-run outcomes? Check all that apply.

a) Black markets develop.

b) The quantity of available rental housing units falls.

c) The future supply of rental housing units increases.

d) The quality of rental housing units falls.

Solutions

Expert Solution

Following are the common long run outcomes of rent control on the housing.

- Black markets develop (Non- price method of rationing emerge )

- The quantity of available rental housing units falls: By inforcing rents below the market price, rent control reduces the profitability of rental housing, leads to outflow of investment from the rental market. Hence, neither new investment in the rental market take place and the existing investment driven out from the rental market. Therefore, the quantity of available rental housing units falls.

Answer: Option (A) and Option (B).

Rahul Sunny answered 2 years ago

Next > < Previous

Related Solutions

26. Rent controls have five important effects on the market for apartments. Please list and provide...

26. Rent controls have five important effects on the market for apartments. Please list and provide an example of each effect.

1. What are two economic arguments AGAINST legal rent controls to keep rents below the equilibrium...

1. What are two economic arguments AGAINST legal rent controls to keep rents below the equilibrium amount? 2. Explain why "toothpicks" are so inelastic. 3. Airline travel is expensive. Then why is "airline travel, short run," so very inelastic? Why is "Airline travel, long run" so elastic? 4. Explain why "Legal services, short-run" are very expensive, yet are inelastic. 5. Explain why "Automobiles, long -run" are inelastic 0.2, but "Chevrolet or Ford or Toyota or other make of automobile" is...

6. Show the effect on the equilibrium interest rate of a decrease in the price level....

6. Show the effect on the equilibrium interest rate of a decrease in the price level. Show using the graph for the nominal money market. Clearly state what happened to the equilibrium interest rate. (5 pts.)

Price ceilings, such as rent controls, will lead to _______ if they are binding. Group of...

Price ceilings, such as rent controls, will lead to _______ if they are binding. Group of answer choices an equitable distribution of housing surpluses shortages more apartments being built

Refer to the data in the table below. Suppose that the present equilibrium price level and...

Refer to the data in the table below. Suppose that the present equilibrium price level and level of real GDP are 100 and $280, and that data set A represents the relevant aggregate supply schedule for the economy. (A) (B) (C) Price Level Real GDP Price Level Real GDP Price Level Real GDP 100 205 110 230 110 280 100 230 100 230 100 255 100 255 95 230 95 230 100 280 90 230 90 205 Instructions: Enter your...

Name and explain ONE effect of price controls, either minimum price controls (price floors) OR maximum...

Name and explain ONE effect of price controls, either minimum price controls (price floors) OR maximum price controls (price ceilings).

Suppose demand for apartments in Honolulu is P=6600-0.5q and supply is P=0.25q. Derive the equilibrium price...

Suppose demand for apartments in Honolulu is P=6600-0.5q and supply is P=0.25q. Derive the equilibrium price and quantity for apartments. Show on a graph. Calculate the producer and consumer surplus. If the city of Honolulu passes a rent control, forcing a rent (or price) ceiling equal to $1800, what is the quantity supplied, quantity demanded, and the shortage? Calculate the new consumer surplus, producer surplus, and deadweight loss, and show these on your graph. If a black market develops after the rent...

Question 1 a) Explain the effect on the equilibrium interest rate and output level of an...

Question 1 a) Explain the effect on the equilibrium interest rate and output level of an increase in the real money supply, state if this is an contractionary monetary or fiscal policy and show the effect graphically. fully label the graph (10) b) Explain the effect on the equilibrium interest rate and output level of a decrease in taxation. State if this is an expansionary or contractionary monetary or fiscal policy and show the effect graphically. (10)

When the price level is above its equilibrium level, there is unplanned investment, with ...

When the price level is above its equilibrium level, there is ______ unplanned investment, with ______ products supplied than demanded.Multiple choice question.negative; fewerpositive; fewernegative; morepositive; more

Which of the following would cause the aggregate price level to fall and the equilibrium level...

Which of the following would cause the aggregate price level to fall and the equilibrium level of real GDP to increase in the short run? Question 9 options: a) the short-run aggregate supply curve shifts left b) aggregate demand shifts left c) the short-run aggregate supply curve shifts right d) aggregate demand shifts right

Subjects