A Rent Control Has Been Imposed on the Market for Rental

question 40

Multiple Choice

A rent control has been imposed on the market for rental housing in a country.If the long run supply curve in this competitive market is more price elastic than the short run supply curve,it implies that:

• A)the deadweight loss of the rent control is higher in the long run compared to the short run.
• B)the deadweight loss of the rent control is higher in the short run compared to the long run.
• C)the deadweight loss of the rent control is zero in the long run.
• D)the deadweight loss of the rent control is zero in the short run.

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be consumed by anyone and one person’s consumption doesn’t reduce availability to others.

Free-riders

Individuals who benefit from resources, goods, or services without paying for them, often seen in public goods and collective risk scenarios.

Private Markets

are markets where transactions are conducted directly between two parties without being publicly traded on an exchange.

Repeat-purchase Item

A good or service that consumers buy frequently or repeatedly over time, indicating loyalty or sustained need.