Asked by Erika Nations on Apr 29, 2024
Verified
The government imposes a maximum price on apartments that is above the equilibrium price. You accurately predict that
A) the law will have no economic impact.
B) the law will create a surplus of apartments.
C) renters will find that landlords start offering to furnish the apartments.
D) landlords are less likely to do routine maintenance work in the apartments.
Maximum Price
A price ceiling set by the government or another regulatory body, beyond which prices cannot legally rise for essential goods or services.
Economic Impact
The effect of an event, policy, or market change on the economy, which can be measured in terms of changes in employment, GDP, or other economic indicators.
Apartments
Living spaces within a building or complex, typically rented, that provide residential accommodation.
- Comprehend the consequences of market interventions on consumers and producers.
Verified Answer
MZ
michell zhengMay 01, 2024
Final Answer :
A
Explanation :
When a maximum price is set above the equilibrium price, it does not interfere with the market's natural dynamics, as the market price would naturally be lower than the imposed maximum. Therefore, the law would not affect the supply and demand balance, leading to no economic impact.
Learning Objectives
- Comprehend the consequences of market interventions on consumers and producers.