Question

Rent control is an example of a price ceiling. Which of the following problems must be addressed under a

rent control program?
a. what to do with the surplus of rental units
b. how to subsidize renters so that they can afford to pay the higher rents
c. how to decrease the quantity of rental units to the equilibrium level
d. whether the opportunity cost of rental units equals the competitive market price
e. how to allocate scarce rental units

Answer 1

E. how to allocate scarce rental units

even if the goal of a price ceiling is to help those with lower income levels get housing , this doesn't stop those who are easily able to afford housing from taking the cheaper units under the ceiling from those who would have actually benefited from it.