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Elasticity and Incentives

Question 1 • 2102320-Economics HONORS - Edgenuity Teacher

The price ceiling means there will be in the supply of rental spaces.

Answer
A
a shortage
B
a surplus
C
an increase

Explanation

A price ceiling keeps rent below the market equilibrium price. At that lower price, more people want to rent spaces, while landlords are willing to supply fewer, so quantity demanded exceeds quantity supplied. This creates a shortage of rental spaces, choice A.

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