<P> Rent control is a price ceiling on rent . When soldiers returned from World War II and started families ( which increased demand for apartments ) , but stopped receiving military pay , many could not deal with the jumping rent . The government put in price controls , so soldiers and their families could pay the rent and keep their homes . However , this increased the quantity demanded for apartments and lowered the quantity supplied , meaning that available apartments were rapidly taken until none were left for late - comers . Price ceilings create shortages when producers are allowed to abdicate market share or go unsubsidized . </P>
<P> Rent control is a price ceiling on rent . When soldiers returned from World War II and started families ( which increased demand for apartments ) , but stopped receiving military pay , many could not deal with the jumping rent . The government put in price controls , so soldiers and their families could pay the rent and keep their homes . However , this increased the quantity demanded for apartments and lowered the quantity supplied , meaning that available apartments were rapidly taken until none were left for late - comers . Price ceilings create shortages when producers are allowed to abdicate market share or go unsubsidized . </P>
one side effect of price ceilings is that they produce
one side effect of price ceilings is that they produce
shortages
shortages