Asked by Dellarose Dickson on Jul 25, 2024
Verified
In order to control the rising price of housing,the county council enacts rent controls.This mandated price is below the equilibrium price.Consequently,a shortage in the supply of housing may result.
Rent Controls
are government policies or laws that limit the amount landlords can charge for leasing properties to protect tenants from rapid increases in rent.
Equilibrium Price
The market price at which the quantity of goods supplied is equal to the quantity of goods demanded.
Shortage
A situation in which demand for a good or service exceeds its supply in a market.
- Understand how economic policies like price controls can impact supply and demand, and potentially lead to shortages.
Verified Answer
BR
BINOY RAJESHJul 30, 2024
Final Answer :
True
Explanation :
When the county council enacts rent controls below the equilibrium price, it causes the price landlords can charge to be lower than what the market would naturally dictate. This leads to a situation where the quantity of housing demanded exceeds the quantity supplied, creating a shortage.
Learning Objectives
- Understand how economic policies like price controls can impact supply and demand, and potentially lead to shortages.