Price controls usually enhance efficiency in the allocation of resources.

Question

Quizplus · Accepted Answer

Price controls, such as price ceilings or floors, often lead to distortions in the market and inefficient allocation of resources. They can create shortages or surpluses of goods or services and deter suppliers from producing or consumers from buying at the controlled price. Additionally, price controls can lead to black markets or underground economies where goods are sold at a higher, unregulated price.

Price Controls Usually Enhance Efficiency in the Allocation of Resources