Economics Correction - Economics Correction Lindsey Barnett...

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Economics Correction Lindsey Barnett Rent Control is an example of price control analysis: Rent control is an example of price controls because it regulates and sets a standard for the price. Rent control is an example of a price ceiling. A price ceiling and rent control both keep prices from getting too high. In a ceiling, a bar is set and you cannot set the price higher than that bar. In rent control it is very similar, since you pick a price that will be the maximum and the landlord cannot charge higher than that specific price. Rent control is a price ceiling and they both keep the prices low. Graph Analysis: The graph shows that no matter what the price control cannot be raised above the ceiling. The economic impact because of the price ceiling is that it is economically
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Unformatted text preview: efficient and gives everyone in the market what seems to be a fair chance since it regulates the price. The graph also shows that it is binding and effective because of the price ceiling. A price ceiling is considered effective and bindings when it is positioned bellow the equilibrium. This graph may on one hand be efficient, but that does not mean it is equitable. Rent control leaves room for nepotism and creates a shortage, a shortage is when the amount supplied falls short of the quantity demanded by the market, and because of all this the graph may be considered efficient, but it is not equitable....
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  • Fall '11
  • DominicZanot
  • Economics, English-language films, one hand, LINDSEY BARNETT

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