In 1970s the federal government imposed price controls on natural gas. Which of the following statements is true?
A) These price controls caused a chronic excess supply of natural gas.
B) Consumers gained from the price controls, because consumer surplus was larger than it would have been under free market equilibrium.
C) Producers gained from the price controls because producer surplus was larger than it would have been under free market equilibrium.
D) This episode of price controls was unusual, because it resulted in no deadweight loss to society.

Question

Quizplus · Accepted Answer

Price controls on natural gas in the 1970s led to lower prices, increasing consumer surplus compared to a free market equilibrium, but they also caused shortages, not excess supply.

In 1970s the Federal Government Imposed Price Controls on Natural