A Rent Ceiling Results in a Shortage

question 123

Multiple Choice

A rent ceiling results in a shortage. As a result, which of the following do you expect?

• A) a shortage of applicants for the apartments available
• B) discrimination as tenants choose their landlords, possibly based on race, age, or gender
• C) a black market for apartments whereby higher rents are obtained through various other charges
• D) in the long-run, more and more people will want to become landlords

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Definitions:

Ending Inventory

The total value of all inventory a company has in stock at the end of an accounting period.

Variable Production Costs

Costs that vary in proportion to the level of production or business activity.

Variable Costing

An accounting method that only takes into account the variable production costs (direct materials, direct labor, and variable manufacturing overhead) when calculating product cost.

Period Cost

Expenses that are not directly tied to production and are expensed in the period they are incurred, such as selling, general, and administrative expenses.