Asked by Victoria Montanez on Jul 28, 2024
Verified
Price ceilings will impose costs on society because they:
A) will eliminate long waiting lines.
B) may result in black markets,where prices are lower than the market-determined price would be.
C) lead to a smaller quantity offered on the market.
D) help businesses instead of consumers.
Price Ceilings
Legally imposed maximum prices on goods or services that aim to keep them affordable for consumers, which can lead to shortages if set below the market equilibrium.
Black Markets
Illegal trading systems where goods or services are bought and sold at prices not regulated by the government, often in violation of price controls or rationing.
- Recognize the impact of price ceilings on market efficiency and the well-being of both consumers and producers, including shortages.
Verified Answer
SM
Shaghayegh MehrvarzJul 30, 2024
Final Answer :
C
Explanation :
Price ceilings, when set below the market equilibrium price, lead to shortages as the quantity demanded exceeds the quantity supplied, resulting in a smaller quantity offered on the market.
Learning Objectives
- Recognize the impact of price ceilings on market efficiency and the well-being of both consumers and producers, including shortages.
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