Rent ceilings increase search activity result in surpluses c

Rent ceilings

increase search activity.

result in surpluses.

create efficiency.

benefit producers.

have no effect if they are set below the equilibrium rent.

Solution

When a price ceiling is applied to a housing market it is called a rent ceiling.

The time spent looking for someone with whom to do business is called search activity. When a price is regulated and there is a shortage, search activity increases.hence rent ceiling leads to increased search activity.