Multiple Choice
Suppose the equilibrium rent for apartments in New York City is $2,000 per month. If the city authorities declared effective tomorrow that rents would not be allowed to exceed $1,800 per month, what do you think would happen to the relationship between supply and demand for rental apartments in New York City?
A) The supply of rental apartments would go up and rents would fall below $1800 per month.
B) There would be very little new construction of apartments in New York City and shortages would develop.
C) People would move out of New York City because of the new restrictions.
D) The demand for apartments would fall short of available supply.
Correct Answer:
Verified
Correct Answer:
Verified
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