For each question, select the best answer. Explain concisely why it is the best answer. Credit is given for the reasons, not just the correct answer.

4. We say that rent stabilization creates rationing because . . .

A. Those who are in rent stabilized housing are issued ration booklets which they use to pay the rent.

B. Some people don't want to live in rent stabilized apartments because they tend to be old (pre1974).

C. So long as rent stabilization keeps rents below the market level, demand must exceed supply, which is the very definition of rationing.

D. Supply will not be at its first best level.

E. So long as rent stabilization keeps rents below the market level, the intervention in the market keeps some sellers from reaching buyers, meaning there is excess supply