(Figure: Rent Controls) Use Figure: Rent Controls.If rent controls are set at Rent₁:

A) rental apartments may be of inefficiently low quality.
B) there will be an efficient allocation of rentals.
C) some landlords may break the law by renting below the mandated price.
D) new apartments will be constructed.

Rent Controls

Government-imposed limits on the amount landlords can charge for leasing properties, aimed at making housing more affordable.

Inefficiently Low Quality

A form of inefficiency in which sellers offer low-quality goods at a low price even though buyers would prefer a higher quality at a higher price; often a result of a price ceiling.

Allocation

The process of distributing resources or goods among different uses, users, or parties in a way that optimally meets criteria or objectives.