A student is preparing for an AP Economics exam and comes across a free response question that asks them to 'explain the impact of a price ceiling on the market for rental housing.' What is the best approach for the student to take based on the task verb 'explain'?

To effectively explain the impact of a price ceiling on the market for rental housing, the student should start by defining what a price ceiling is. A price ceiling is a government-imposed limit on how high a price can be charged for a product or service, which in this case is rent for housing. Next, the student should discuss how a price ceiling can lead to a shortage of rental units because it makes housing more affordable, increasing demand while discouraging landlords from providing enough housing due to lower profits. For example, if a city sets a rent ceiling below the market rate, more people will want to rent, but fewer landlords will want to rent out their properties. Finally, the student should conclude by explaining the overall effects on the market, such as decreased quality of housing and longer waiting lists for rentals, which illustrates the consequences of this government intervention.