Seinfeld: The Apartment (Rent Control)/ Seinfeld on the Luck of NYC Rent Control

 

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Seinfeld Economics: The Apartment (Rent Control)

by Linda Ghent
Jerry lives in a rent controlled building. The only time an apartment opens up is when Mrs. Hudwalker dies, because rent controls create immobility. Elaine and Jerry find out about the opening, and because Elaine happens to be first in line, she gets it for $400 per month. Subsequently, Jerry gets worried about having Elaine living so close, and tells Elaine that she can’t have the apartment–the super was offered a $5,000 bribe.

price ceiling isa government-imposed limit on the price charged for a product. If the priceceiling is set below the market equilibrium price, a shortage will occur. Thisleads to a rationing problem.
A rationing mechanismis a system for choosing who gets how many goods during a shortage. Long linesare often used to ration goods in shortage (so the good is distributed on afirst-come, first-serve basis). In addition, black markets often develop as away of rationing goods that are in shortage.
Seinfeld Economics: The Apartment (Rent Control)by Linda Ghent
Jerry lives in a rent controlled building. The only time an apartment opens up is when Mrs. Hudwalker dies, because rent controls create immobility. Elaine and Jerry find out about the opening, and because Elaine happens to be first in line, she gets it for $400 per month. Subsequently, Jerry gets worried about having Elaine living so close, and tells Elaine that she can’t have the apartment–the super was offered a $5,000 bribe.

price ceiling isa government-imposed limit on the price charged for a product. If the priceceiling is set below the market equilibrium price, a shortage will occur. Thisleads to a rationing problem.
A rationing mechanismis a system for choosing who gets how many goods during a shortage. Long linesare often used to ration goods in shortage (so the good is distributed on afirst-come, first-serve basis). In addition, black markets often develop as away of rationing goods that are in shortage.