Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
An excess supply of apartments, leading to lower rents.
B
A shortage of available apartments, making it harder for renters to find housing.
C
An increase in the overall quality of apartment units due to competition.
D
No change in the rental market as demand remains stable.
Understanding the Answer
Let's break down why this is correct
Answer
When a local government sets a price ceiling on rental apartments, it means that landlords cannot charge more than a certain amount for rent. This is intended to help people find affordable housing. However, the most likely outcome is that the number of available rental apartments will decrease. Landlords may decide not to rent their apartments or may convert them to other uses because they can't charge enough to cover their costs. For example, if a landlord usually rents an apartment for $1,200 but the ceiling is set at $1,000, they might choose to take it off the market or sell the property instead, leading to fewer options for renters.
Detailed Explanation
When the government sets a limit on how high rents can be, it can lead to fewer apartments available. Other options are incorrect because Some might think that lower prices mean more apartments will be available; It's a common belief that competition improves quality.
Key Concepts
Price Ceilings
Market Shortages
Government Intervention
Topic
Price Controls and Market Outcomes
Difficulty
easy level question
Cognitive Level
understand
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