Graphical Representation of the Rental Market with Rent Control

A city government, concerned about rising housing costs, imposes a maximum legal price for apartment rentals that is significantly below the current average market rate. Which of the following outcomes is the most likely consequence of this policy?

Evaluating a Rent Ceiling Proposal

Effectiveness of a Price Control

A government law that establishes a maximum legal rent of $2,000 per month for apartments in a city where the market-clearing rent is $1,500 per month will create a housing shortage.

A government imposes a legal maximum price on apartment rentals that is below the market-clearing level. Match each resulting market phenomenon with its correct description.

Evaluating the Economic Impacts of a Rent Ceiling

Explaining the Housing Shortage from a Rent Ceiling

A city government imposes a legally binding maximum price on apartment rentals, set below the price that would naturally occur in the market. Arrange the following events into the logical sequence that would typically unfold as a result of this action.

In a city, a government-imposed maximum legal rent of $1,200 per month is in effect. At this price, 10,000 people are seeking to rent apartments, but landlords are only willing to make 7,000 apartments available. This gap of 3,000 apartments represents a market ________.

The rental market in a university town has a market-clearing monthly rent of $1,000 per apartment. The city council imposes a maximum legal rent of $800 per month. Shortly after, the university significantly expands its enrollment, attracting thousands of new students to the town. How does this university expansion alter the effects of the existing maximum rent policy?