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Andy Rousch
  • Investor
  • Mt. Arlington NJ
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Question my MBA professor asked me, looking to surprise him

Andy Rousch
  • Investor
  • Mt. Arlington NJ
Posted

Suppose now that the proposal before the City Council contemplates imposing a price ceiling on apartment rentals, but not on house rentals. Would owners of rental houses in this city be likely to support this proposal, or would they prefer the status quo (i.e., no price ceilings)? Provide the economic rationale for your answer. (In answering this question, you should ignore all supply-side considerations. In other words, just assume that supply adjusts fully to accommodate demand.)

This is a question in my MBA business finance course. I figured I would bring it to BP and see what professionals think, and I will copy, paste, and of course cite them with a link to BP and maybe get a chance to teach my teacher a thing or two while he is teaching me! who knows maybe he will become a fellow BP member if he isn't already

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Joe Villeneuve
#5 All Forums Contributor
  • Plymouth, MI
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Joe Villeneuve
#5 All Forums Contributor
  • Plymouth, MI
Replied

Whatever answer might be given is useless.  In real life, you can't just say, "...ignore all supply-side considerations...".  Any answer you might give, would be useless in real life, once the real world introduces the "...all supply-side considerations...".

Have you ever seen the movie, "Back to school" with Rodney Dangerfield?

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