Determine what the policy generates


In the market equilibrium, with a price of $500 there are 2000 apartments. If the government decides to enact a rent control policy, with a maximum price of $400, it reduces the quantity to 1500 apartments. Due to the rent control decreasing the total surplus of the market, the policy generates a(n) __________ .

A. excess supply

B. equilibrium

C. higher price

D. deadweight loss

Request for Solution File

Ask an Expert for Answer!!
Microeconomics: Determine what the policy generates
Reference No:- TGS040568

Expected delivery within 24 Hours