Price ceiling question help.

Question

1- Imagine that a city council decides that the market price for student rental apartments is too high. It passes a law that establishes a rental price ceiling of $800 per month. The result of the price ceiling is a shortage. Which of the following has caused the shortage of apartments?

 

a.
A spike in demand from many students who want to rent cheap apartments

b.
The drop in supply caused by apartment owners pulling their units off the rental

c.
Both suppliers and demanders. Landlords will reduce the supply of apartments, and the demand form renters will increase.

d.
The change in price as a result of the price ceiling set by the city council

e.
c and d.

f.
All of the above

g.
None of the above.

Answer 1

Let's go with all of them....

 

The demand spike is a big part of it, but

price caps tend to make vendors and owners

angry and pull out...