ECONOMICS
PRICE CEILINGS AND FLOORS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
A price ceiling that imits the amount a property owner can charge for renting out a home, apartment or other real estate
|
|
|
A price floor that imits the amount a property owner can charge for renting out a home, apartment or other real estate
|
|
|
An order that sets a cap on how much rent can be raised over time
|
|
|
None of the above
|
Detailed explanation-1: -Rent control is an example of a price ceiling, a maximum allowable price. With a price ceiling, the government forbids a price above the maximum. A price ceiling that is set below the equilibrium price creates a shortage that will persist.
Detailed explanation-2: -A central Rent Control Act was passed by the legislature in 1948. It regulates the rules of letting out a property and ensures that neither the landlords nor the tenants’ rights are exploited by the other.
Detailed explanation-3: -[31st December, 1958] An (Act to provide for the control of rents and evictions and of rates of hotels and lodging houses, and for the lease of vacant premises to Government, in certain areas in the Union territory of Delhi.
Detailed explanation-4: -The increase in the rental has to be in consonance with what is provided in the agreement. The owner cannot seek to increase the rent over and above 7.5%.