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Home / Questions / Suppose that the market equilibrium monthly rent per room in a city is Rs.3,000.

Suppose that the market equilibrium monthly rent per room in a city is Rs.3,000.

Suppose that the market equilibrium monthly rent per room in a city is Rs.3,000. At this rent 8000 rooms per year are rented. If a local rent control ordinance establishes a ceiling of Rs.3,500 per room, which of the following is true?


[A]Shortage of rooms as the quantity of housing demanded increases
[B]Shortage of rooms as the quantity of housing supplied decreases
[C]The equilibrium remains unaffected
[D]Surplus of rooms as the quantity of housing demanded decreases

Jan 09 2018 View more View Less

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