Question
Based on the bold answers below. Please let me know which one's are the correct answers. The graphic shows the rental market for apartments. Suppose
Based on the bold answers below. Please let me know which one's are the correct answers.
The graphic shows the rental market for apartments.
Suppose the rent control law sets a maximum price of $15.
A. Suppose a rent control law is passed. Rent control is an example of aprice ceiling/price floor.
B. A binding rent control law would set the regulated price atP2/P3.
The goal of many proposals to interfere in the free market is toredistribute income.
At the rent-controlled price, suppose Dwight, George, Warren and Theodore are able to rent and Ronald and Calvin are not able to rent.
At the rent-controlled price Barrack, Bill, Lyndon, Robert, Harry and Jimmy rent some of the apartments they own but keep some of their apartments off the market because the rent controlled price is too low.
C. The rent control law is redistributing income so that Dwight, George, Warren, and Theodore are being madericher/poorerand Ronald and Calvin are being madericher/poorer.
D. Any analysis of price regulation must take into account theEnforcement Problem.
E. In this market,Dwight/Ronald has an incentive to offer to pay more than the rent controlled price because he cannot find an apartment to rent at the rent controlled price.
F. All sellers/None of the sellers have an incentive to rent more of their apartments above the rent controlled price.
G. Without an enforcement mechanism, Dwight, George, Warren and Theodore wouldignore/obeythe rent control law.
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