Answer to Question #286188 in Microeconomics for Dls

Question

Suppose you are a manager of a County government project that is meant to provide rent-regulated housing units in low-income settlements. Using your knowledge of equilibrium, advice the Governor whether this policy will be a success.

Answer 1

Solution:

a.). The policy will be successful since it will increase the demand for rent-regulated houses by low-income earners. The role of the policy is to make houses affordable for low-income earners by building cheaper houses that are government regulated. The demand for such houses will increase as people seek them.