Question

Suppose a new​ off-campus university apartment complex could rent its rooms on the open market for​ $900 a month. ​If, instead, the university chooses to cap the price of rooms to​ $500 a month for​ students, the result would be that​ ____________.

Answer 1

There will be a sharp increase in quantity demanded because the rooms valued at $900 are now going for a lower price of $500 resulting in shortage of supply within a short time.

This could further lead to practices similar to black market transactions, where people that do not need the rooms will buy at lower price and sell at higher price. Because of scarcity people will be forced to buy at the higher prices from third party agents.

Step-by-step explanation: