An example of a binding price ceiling is: a. a minimum wage law that is set above the equilibrium price. b. a minimum wage law that is set below the equilibrium price. c. rent control that is set above the equilibrium price. d. a black market that sets the price below the equilibrium price. e. rent control that is set below the equilibrium price.

Respuesta :

Answer:

e. rent control that is set below the equilibrium price.

Explanation:

The law binds, ties, it forces the market to make trnasaction on this price.

The owners of the houses and building for rent would rent at a higher price than the stablished by the goverment.

This control force them to ggive a lower rent than they think is the right one for granting the right of use of his property.

As the housing market demand is quite inelastic and people need a place to live they cannot respond to price increase  with a lower house demand. At most, they can move to low-income zone when the rent is more affordable.

The government is doing this control with the idea of ensure the families well-being to don't pay exorbitant prices in the housing market