Asked by David Torrez on Jul 05, 2024
Verified
When a tenant in a rent-controlled apartment sublets the apartment to another renter at a rent higher than the price ceiling:
A) it is inefficient.
B) the transaction takes place on a black market.
C) there is an increase in quantity demanded.
D) there is a decrease in quantity demanded.
Black Market
An illegal trading system where goods or services are exchanged without the authorization of the government.
Rent-Controlled Apartment
Housing units whose rent is set and regulated by a government authority, typically below the market rate to make it affordable.
- Evaluate the development and consequences of illicit trade marketplaces resulting from strict price regulations.
- Comprehend the conceptual and practical consequences of imposing price limits on housing sectors, especially in the context of rental control.
Verified Answer
SA
sekandi anthonyJul 06, 2024
Final Answer :
B
Explanation :
Subletting at a rent higher than the price ceiling takes place on a black market, as it is illegal under rent control laws. The transaction is not recorded and regulated by the government, leading to potential inefficiencies and unfairness in the rental market.
Learning Objectives
- Evaluate the development and consequences of illicit trade marketplaces resulting from strict price regulations.
- Comprehend the conceptual and practical consequences of imposing price limits on housing sectors, especially in the context of rental control.