Inefficient use of housing space will result.

The tenant in a rent-controlled apartment will think twice before moving. Why? Even though the tenant might want a larger or smaller space or an apartment closer to work, he or she will be less likely to move because it will be much more difficult to find a unit that’s vacant. Turnover will be lower, [...]

The impact of price floors

A price floor establishes a minimum price that can legally be charged. The government imposes price floors on some agricultural products, for example, in an effort to artificially increase the prices that farmers receive. When a price floor is imposed above the current market equilibrium price, it will alter the market’s operation. A surplus (Qs [...]