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Question
One strategy someone might use to be elected mayor of a university town is to place a binding price ceiling on rent for student apartments. What will happen if he or she gets elected and is able to pass such a law?
a. The price ceiling will increase the number of apartments available for rent.
b. The price ceiling will cause the demand curve to shift.
c. The price ceiling will cause the supply curve to shift.
d. The price ceiling will decrease the number of students who want to rent an apartment.
e. The price ceiling will cause students to sleep in their cars or to move in with their friends because they wont be able to find places to live.
Answer
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