12 Aug How does Scarcity play into what they have described?
Prior to completing this exercise, be sure you have done the following:
- Read the article: Do Rent Controls Work? (PDF)
- Watched the video
Rent controls are laws that place a price ceiling (or maximum price) on what landlords are able to charge their tenants in a particular city. Although it certainly sounds wonderful to pay less for an apartment, by their very definition rent controls are inefficient and lead to market failure.
In your discussion response, address the following:
- Why are rent controls inefficient?
- What is the market failure that occurs when rent controls are imposed?
- Put economic theory aside for a moment. Do you think that cities such as New York City should utilize rent controls? Why or why not?
Be sure to end your post with a reflective and thoughtful question. (Ex. Does the government have any influence on rent prices in your city? Why do you think this is the case?)
In response to at least 2 of your classmates, respond to their posted question. Do you have any insight and other approaches to thinking about their decision-making process? How does Scarcity play into what they have described?
