Final answer:
Rent control laws set a maximum price for rent, but they do not establish a minimum amount. These laws aim to protect renters by restricting excessive rent increases, but the equilibrium price and market forces still play a role.
Step-by-step explanation:
Rent control laws set a maximum price that landlords can charge for rent. These laws are intended to protect renters by preventing excessive rent increases. However, rent control laws do not set a minimum amount for rent. Instead, they typically establish a price ceiling that restricts the amount by which rents can be increased each year.
For example, if a city passes a rent control law with a maximum price of $500 for apartments, landlords cannot charge more than this amount. However, this does not mean that all apartments will be rented at $500. The demand and supply forces in the market still play a role, and if the equilibrium price is higher than the rent control limit, there may be a shortage of rental housing.
Overall, rent control laws aim to provide affordable housing options for tenants, but they can have unintended consequences, such as decreased rental supply and potential housing shortages.