Consider the use of rent control policies for apartment buildings. Which set of words best fills in the blanks in the following statement:
Rent control policies are expected to create a in the market, and this will be a more severe problem in the .
a. Shortage, short-run
b. Shortage, long-run
c. Monkey, coconuts
d. Surplus, short-run
e. Surplus, long-run
As per the statement given above, Rent control policies are expected to create a shortage in the market and this will be a more severe problem in the long run. Hence, option B is the correct option.
The reason behind this is that the rent control policies severely restrict the supply of the rooms and in the long run, this turns out to be a very major problem.