Which of the following statements about price ceilings is false?
A)Quality often suffers when a price ceiling is imposed.
B)Rent control is an example of a price ceiling.
C)Poor people will always be able to buy more of the product than if the price ceiling did not exist.
D)Price ceilings result in shortages.
E)Just as a producer is not allowed to sell a good for more than the price ceiling, it is illegal for a consumer to pay more than the price ceiling.

Question

Quizplus · Accepted Answer

The statement "Poor people will always be able to buy more of the product than if the price ceiling did not exist" is false. Price ceilings do not increase the quantity of a product available in the market. Instead, they often lead to shortages, making it difficult for all consumers, including the poor, to purchase the product. In fact, price ceilings can lead to black markets where the product can be sold at higher prices.

Which of the Following Statements About Price Ceilings Is False