When a Rent Ceiling Below the Equilibrium Rent Is Put

question 68

Multiple Choice

When a rent ceiling below the equilibrium rent is put in place, the outcome is

• A) inefficient because marginal benefit equals marginal cost.
• B) inefficient because marginal benefit is greater than marginal cost.
• C) inefficient because marginal benefit is less than marginal cost.
• D) efficient because marginal benefit is greater than marginal cost.
• E) efficient because marginal benefit equals marginal cost.

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Definitions:

Adequate Consideration

Sufficient value or compensation exchanged between parties in a contract, making the agreement legally binding.

Detriment

A state of being harmed or damaged, often used in legal contexts to describe loss or injury.

Adequacy of Consideration

Refers to a legal assessment of whether the consideration (value) given in exchange for a promise or for performance in a contract is fair and reasonable.

Unilateral Contract

A contract where only one party makes a promise or undertakes a performance without requiring a reciprocal agreement from the other party.