Who are unambiguously worse off in the case of a price ceiling?
A)Both buyers and sellers
B)Buyers
C)Sellers
D)Neither buyers nor sellers
E)Government officials

Question

Quizplus · Accepted Answer

Price ceilings are set below the equilibrium price, which reduces the price for buyers but limits the amount sellers can charge. This means that sellers are unambiguously worse off as they are unable to sell as much of their product as they would like and may even face losses. Buyers may initially benefit from the lower price, but there may be shortages of the product due to reduced supply. So, both buyers and sellers will eventually be worse off due to the impact of the price ceiling. However, the question asks for "unambiguously worse off," and that would be the sellers. Therefore, option C is the correct answer.

Who Are Unambiguously Worse Off in the Case of a Price