Asked by Vonda Simpson on Jul 08, 2024
Verified
Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.
Long Lines
Typically a result of excessive demand or insufficient supply, creating a situation where people have to wait for a long time to avail of a service or purchase a product.
Rationing Methods
Techniques used to distribute scarce goods among consumers when demand exceeds supply, such as price increments, waiting lists, or coupons.
Binding Price Ceiling
A government-imposed limit on the price of a good or service that is set below the equilibrium market price, leading to shortages.
- Acknowledge the results of price ceiling policies, such as the development of shortages, rationing strategies, and disturbances in market functionality.
Verified Answer
Learning Objectives
- Acknowledge the results of price ceiling policies, such as the development of shortages, rationing strategies, and disturbances in market functionality.
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