Question

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.

The future supply of rental housing units increases.

Efficient use of housing space results.

Nonprice methods of rationing emerge.

The quantity of available rental housing units falls.

Answer 1

Answer:

Nonprice methods of rationing emerge. 

The quantity of available rental housing units falls.

Explanation:

Rent control is a form of binding price ceiling.

A price ceiling is when the government or an agency of the government sets the maximum price for a good or service.

A price ceiling is binding when it is set below equilibrium price.

When there's a rent control, its effects are :

It reduces the quantity of houses available for rent. This leads to scarcity.

2. The quality of houses would fall. In order to maximise profit, builders would begin to use substandard materials.

3. Non price rationing would emerge

4. Black markets for rental houses would emerge.

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