The equilibrium rent for four-bedroom apartments is Rs 1,500 per month. If the city government imposes a price ceiling of Rs 1,600 per month on rents, which of the following will happen?
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1 mark, −0.25MicroeconomicsPerfect competitionPrice ceilings, floors and subsidiesModerateabout 1 min
JNU SSS 2012 Question 48: Perfect competition
Answer and worked solution
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What this question tests
This question is on Price ceilings, floors and subsidies, part of Perfect competition in Microeconomics.
What binding and non-binding price controls and per-unit subsidies do to quantity, shortage and cost.
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Question from the JNU SSS 2012 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.