Question

suppose the government of greenville, after receiving numerous complaints from residents about rising housing costs, imposed a rent control regulation which limits the rent to $2000 for a 2 - bedroom apartment. this limit is below the market rate of $2500 for such apartments. 1. this regulation is a type of select price ceiling 2. ...and is likely to create a select shortage 3. ...which over a longer period of time is likely to select more elastic less elastic 4. select in the long run.

Explanation:

1. A price - ceiling is a legal maximum price. Since the rent control sets a maximum rent of $2000 which is below the market rate of $2500, it is a price - ceiling.
2. When a price - ceiling is set below the equilibrium price, quantity demanded exceeds quantity supplied, creating a shortage.
3. In the long run, both supply and demand for apartments become more elastic. Suppliers can adjust the quantity of apartments available (e.g., build more or convert to other uses), and demanders have more time to find alternative housing options.

Answer:

1. price ceiling
2. shortage
3. more elastic