A binding rent-control price ceiling does NOT result in: inefficiently high quality of the good being...
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Homework Answers
Answer: Inefficiently high quality of the good being sold.
A binding price ceiling is when the price ceiling that is set by the government is below the equilibrium price.
Price ceilings cause inefficiency due to
-inefficient low quality
-misallocation to consumers
-wasted resources
-black markets
Sellers offer low quality goods at a low price even though buyers would buy a high quality and pay a high price for it. A binding rent-control price ceiling does not result in inefficiently high quality of the good being sold.
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