Rent Controls Set a Price Ceiling Below the Equilibrium Price

question 10

Multiple Choice

Rent controls set a price ceiling below the equilibrium price and therefore:

• A) quantity supplied exceeds the quantity demanded.
• B) quantity demanded exceeds the quantity supplied.
• C) a surplus of rental units will result.
• D) poor people will obviously and clearly be helped.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in profits through dividends.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

Issued

Refers to the number of shares that a corporation has legally sold to investors and are currently outstanding.

Paid-In Capital

The total amount of cash and other assets that shareholders have given a company in exchange for stock.