Questions: Multiple Cholce Question Which of the following in the rental market for housing benefits renters, but makes it unprofitable for suppliers or landowners? Equilibrium price A negative externality A price ceiling A price floor

The answer is a price ceiling.

The equilibrium price is the price at which the quantity of housing demanded by renters equals the quantity supplied by landlords. This price benefits both renters and suppliers as it reflects a balance between supply and demand. Therefore, it does not make it unprofitable for suppliers or landowners.

A negative externality occurs when a third party suffers from a transaction they are not directly involved in. In the context of the rental market, this could be noise pollution or overcrowding affecting neighbors. While negative externalities can affect the desirability of housing, they do not directly make it unprofitable for suppliers or landowners.

A price ceiling is a government-imposed limit on how high the price of rent can be charged. This benefits renters by keeping housing affordable but can make it unprofitable for suppliers or landowners because it may prevent them from charging a market rate that covers their costs and provides a reasonable return on investment. This can lead to a shortage of rental housing as suppliers may withdraw from the market or reduce maintenance and investment in their properties.

A price floor sets a minimum price that can be charged for rent, which is typically above the equilibrium price. This benefits suppliers or landowners by ensuring they receive a minimum income, but it does not benefit renters as it makes housing more expensive. Therefore, it does not fit the criteria of benefiting renters while making it unprofitable for suppliers or landowners.