Suppose that a major hurricane hits Florida,causing widespread damage to homes and businesses.If the legislature imposes price controls in order to keep reconstruction costs reasonable,which of the following is the MOST likely result?

Question

Quizplus · Accepted Answer

Imposing price controls would create an artificial price ceiling on building materials, which would lead to an increase in demand and a decrease in supply. As a result, suppliers would have no incentive to provide as many materials, causing a shortage. This would likely slow down the recovery process and prolong the disruption caused by the hurricane. Additionally, suppliers may not be able to afford to provide the same level of service as before, leading to longer wait times and slower service.

Suppose That a Major Hurricane Hits Florida,causing Widespread Damage to Homes