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 quality of rental housing units falls. Black markets develop. Nonprice methods of rationing emerge. The quantity of available rental housing units falls.

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 quality of rental housing units falls. Black markets develop. Nonprice methods of rationing emerge. The quantity of available rental housing units falls.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 8MC

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Rent controls force landlords to price property below the equilibrium price level. An effect of this is to create a shortage (excess demand) of rental property, as the quantity of rental property demanded is greater than the quantity supplied at that price. When legislation prevents landlords from charging market rents, what can happen in the long run as a result? Check all that apply. The quantity of available rental housing units falls. The future supply of rental housing units increases. An underground economy develops. Landlords earn lower profits from renting housing units, but the rent charged has no effect on either the quantity or quality of rental units.
If firms producing the profit maximizing level of output experience total revenue less than total cost, the market supply will multiple choice increase and equilibrium price will decrease. decrease and equilibrium price will increase. decrease and equilibrium price will decrease. increase and equilibrium price will increase.
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