Since One Effect of Rent Controls Is to Reduce the Supply

question 279

True/False

Since one effect of rent controls is to reduce the supply of available rental properties, rent controls can contribute to the problems of homelessness in cities with rent controls.
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Definitions:

Socially Optimal

A condition or outcome that maximizes the well-being of society as a whole, often considered in economic policies or strategies.

Marginal Social Cost

The total cost to society of producing one additional unit of a good or service, including both private costs and externalities.

Marginal Social Benefit

The additional benefit that society gains from consuming an additional unit of a good or service.

Government Intervention

Actions taken by a government to affect or interfere with economic activity, often to correct market failures and promote economic welfare.