Answer Happy

d. Neither equilibrium price vi quay e. none of the above statements is correct. 25. Suppose a city adopts rent controls (maximum rent prices) to address a perceived shortage of affordable rents. Which of the following represents a correct assessment of the likely impact associated with such a policy? a. Rent controls are price floors which are legally established prices above the equilibrium and necessarily create shortages and hence cannot possibly correct housing shortages. b. Over time the rent controls will lead to a decline in the quality of the housing stock landlords will have little or no incentive to reinvest. c. The size of the rental housing stock will increase over time as landlords invest mo- the rental stock, d. All of the above are correct.