Suppose the equilibrium price for apartments is Rs500 per month and the government imposes rent controls of Rs250 Which of the following is unlikely to to occur as a result of the rent controls?
Correct answer: E. the quality of apartments will improve
- A. There may be long lines of buyers waiting for apartments
- B. Landlords may discriminate among apartment renters
- C. Landlords may be offered bribes to rent apartments
- D. there will be a storage of housing
- E. the quality of apartments will improve
Explanation
Rent controls below equilibrium create a housing shortage, queues, discrimination, bribes, and often lower maintenance or quality. Improved apartment quality is unlikely because landlords have less incentive to invest when rents are restricted.
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