Refer to the Above Graph, Which Shows the Supply and Demand

question 176

Multiple Choice

Refer to the above graph, which shows the supply and demand for rental housing in a city.Given the demand D₁ and the supply S₁ for rental housing, if the government established rent controls in the city at below the equilibrium, then the price of housing would most likely be at:

• A)P₁ and there would be a shortage of rental housing.
• B)P₂ and there would be a shortage of rental housing.
• C)P₃ and there would be a surplus of rental housing.
• D)P₄ and there would be a surplus of rental housing.

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Definitions:

Federal Trade Commission Act

A United States federal law established in 1914 to prevent unfair competition and fraudulent, deceptive practices in the marketplace.

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Actions by businesses that are deceptive, fraudulent, or otherwise detrimental to consumers in the marketplace.

Federal Trade Commission

A federal agency of the United States government, whose principal mission is the enforcement of civil (non-criminal) U.S. antitrust law and the promotion of consumer protection.

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A federal agency of the United States Department of Health and Human Services responsible for protecting and promoting public health through the control and supervision of food safety, tobacco products, dietary supplements, prescription and over-the-counter medications, vaccines, biopharmaceuticals, medical devices, and veterinary products.