Effects Of Cost Ceiling

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The immediate and long term consequences of setting a rent ceiling are practically devastating to an economy. Maximum rent prices directly effect the supply and demand of housing in a city. If the price of rent is fixed below their equilibrium levels, then the amount demanded will essentially surpass the quantity that is supplied. This will ultimately result in a shortage of housing for renters who are trying to establish themselves in a community. Not only do price ceiling causes shortages in the quantity of accommodations available, they also cause the quality of housing to decrease. Because there will be a limited price for what renters will be able to charge their tenants, people who have nicer homes or apartments will be less likely to
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