帕金经济学第9版课件Ch06-9e-lecture.ppt

A Housing Market with a Rent Ceiling A price ceiling or price cap is a regulation that makes it illegal to charge a price higher than a specified level. When a price ceiling is applied to a housing market it is called a rent ceiling. If the rent ceiling is set above the equilibrium rent, it has no effect. The market works as if there were no ceiling. But if the rent ceiling is set below the equilibrium rent, it has powerful effects. A Housing Market with a Rent Ceiling Housing Shortage Figure 6.1 shows the effects of a rent ceiling that is set below the equilibrium rent. The equilibrium rent is $1,000 a month. A rent ceiling is set at $800 a month. So the equilibrium rent is in the illegal region. A Housing Market with a Rent Ceiling At the rent ceiling, the quantity of housing demanded exceeds the quantity supplied. There is a shortage of housing. A Housing Market with a Rent Ceiling Because the legal price cannot eliminate the shortage, other mechanisms operate: Search activity Black markets With a housing shortage, people are willing to pay up to $1,200 a month. A Housing Market with a Rent Ceiling Search Activity The time spent looking for someone with whom to do business is called search activity. When a price is regulated and there is a shortage, search activity increases. Search activity is costly and the opportunity cost of housing equals its rent (regulated) plus the opportunity cost of the search activity (unregulated). Because the quantity of housing is less than the quantity in an unregulated market, the opportunity cost of housing exceeds the unregulated rent. A Housing Market with a Rent Ceiling Black Markets A black market is an illegal market that operates alongside a legal market in which a price ceiling or other restriction has been imposed. A shortage of housing creates a black market in housing. Illegal arrangements are made between renters and landlords at rents above the rent ceiling—and generally above what the rent would have been in an un