Course

Rent Control

Instructor: Alex Tabarrok, George Mason University

This is " Price Ceilings: Rent Controls " from our Principles of Economics: Microeconomics course. Rent controls are a type of price ceiling. We’ll use our diagram

This is "Price Ceilings: Rent Controls" from our Principles of Economics: Microeconomics course.

Rent controls are a type of price ceiling. We’ll use our diagram to show how rent controls create shortages by reducing the supply of apartments available on the market. Rent controls also result in reduced product quality, since they reduce the returns to landlords from renting apartments. Landlords respond by cutting costs or performing less maintenance, leading to lower quality. There are search costs associated with rent controls, and they also lead to a misallocation of resources since apartments are not allocated to renters who value them the most.

Download
Options

Contributed Content (0)

Ask a Question

Please register or login to ask a question