Respuesta :
If the government puts out to help low-income people by establishing a maximum amount that can be paid for rent: a price ceiling has been set and a shortage of rental units may occur.
What is Price ceiling?
A price ceiling is a cap on the highest price that can be charged for a good, commodity, or service that is established by the government or another party. Governments implement price caps allegedly to safeguard consumers from situations when commodities might become unaffordable. Price ceilings stop a price from increasing above a specific threshold. The amount required will exceed the quantity provided when a price ceiling is set below the equilibrium price, leading to excess demand or shortages. Price floors stop a price from dropping below a specific markdown.
Sellers of the product will suffer, as will individuals who are unable to acquire the product at all, along with those who are able to buy it at the lower price set by the price ceiling. A price cap can raise consumer economic surpluses while reducing producer economic surpluses. Because of the lower price, there will be a shortage of product, which will lead to lower sales. Your tenants will be able to afford the home at $400 per month, but you could not turn a profit on the lease.
Hence, If the government puts out to help low-income people by establishing a maximum amount that can be paid for rent: a price ceiling has been set and a shortage of rental units may occur.
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The complete question is,
If the government sets out to help low-income people by establishing a maximum amount for rent:
A. a price floor has been set and a shortage of rental units may occur.
B. a price ceiling has been set and a shortage of rental units may occur.
C.in the long run more rental units will appear.
D. poor people will definitely be helped.
