Question

a price ceiling in big city
big city has a price ceiling of $750 on rent. the price ceiling means there will be a shortage in the supply of rental spaces. landlords will not raise rent prices as demand increases because they. according to the graph, rent would stabilize at if the pri

Explanation:

A price - ceiling is a legal maximum price. In the case of rent, if the price ceiling is set below the equilibrium price ($750 is below the equilibrium rent price of $1000 in the graph), landlords are not allowed to raise prices above the ceiling even as demand increases. This leads to a shortage in the supply of rental spaces as quantity demanded ($Q_D$) exceeds quantity supplied ($Q_S$) at the price - ceiling price.

Answer:

Landlords will not raise rent prices as demand increases because they are not allowed to.