Suppose the market determined rent for apartments is too high for common people to afford. If the government comes forward to help those seeking apartments on rent by imposing control on rent, what impact will it have on the market for apartments?

Open in App

Solution

The impact of rent control on market for apartments is given below:
(i) The consumers will get inferior quality houses. This is because the builders getting lower price will, in turn, build low-quality houses in order to reduce their cost of production.
(ii) Due to rent control, there will be excess demand for apartments. Every person desiring of having apartments will not be able to get the apartments on rent. There will be a long list of waiters.
(iii) Since all the persons seeking apartments on rent control will not get the apartments, some of them will be willing to pay higher rent for the apartments. As a result, there will be black marketing for apartments on rent.

Suggest Corrections

Similar questions

Question 111

Living on his own Sanjay is looking for one bedroom apartment for rent. At Neelgiri apartment, rent for the first two months is 20% off. The one bedroom rate at Neelgiri is Rs.6000 per month. At Savana apartment, the first month is 50% off. The one bedroom rate at Savana apartment is 7000 per month. Which apartment will be cheaper for the first two months? By how much?

Q. An apartment complex has 250 departments to rent. If they rent x apartments then their monthly profit, in dollars, is given by

P (x) = - 8 x^{2} + 3200 x - 80000

How many apartments should they rent in order to maximize the profit ?

Q. Unless they.are used as strictly temporary measures, rent-control ordinances (municipal regulations placing limits on rent increase) have several negative effects for renters. One of these is that the controls will bring about a shortage of rental units. This disadvantage for renters occurs over the long run, but the advantage-smaller rent increases - occurs immediately. In many municipalities, especially in all those where tenants of rent-control units have a secure hold on political power and can get rent-control ordinances enacted or repealed, it is invariably the desire for short-term gain that guides those tenants in the exercise of that power. If the statements above are true, which one of the following can be properly inferred from them ?

Q. If the house rent for one month is ₹500, then what will be the rent for 3 months?

Q. Emily and Olivia rent an apartment near Los Angeles. If they paid $17880 for 120 days, How much they have to pay for each day?

Join BYJU'S Learning Program