Question

Rent control applies to about two-thirds of the private rental housing in New York City. Economic theory suggests that a below-equilibrium price established by rent control: creates a surplus of rental housing. O promotes a rapid increase in the future supply of housing. O results in poor service and quality deterioration of many rental units. O leads to a reduction in housing discrimination against minorities.

Answer 1

Ans) Rent control is the legal maximum price that can be charged for a house by the owner.

Rent control on one hand helps consumers by protecting them from over pricing.

On other hand, it reduces incentive for owner to maintain the house. It also leads to discrimination by the owners for renting house.

It decreases the quantity of house available for rent i.e shortage.

Option c.