In 1989, Hurricane Hugo devastated Charleston, South Carolina, leaving residents with no electricity for light or refrigeration, and completely cut off from the outside world by fallen trees and washed-out roads.Consequently, the price of ice rose 1,000 percent and generators 300 percent.Tree removal firms were charging $4,000 to cut up a single tree.Outraged, the city government enacted an emergency law prohibiting price "gouging." This law is an example of
A)the cost disease of services.
B)a price ceiling.
C)the laissez-faire rule.
D)the indispensable necessity syndrome.

Question

Quizplus · Accepted Answer

The emergency law enacted by the city government to prohibit price "gouging" during the aftermath of Hurricane Hugo is an example of a price ceiling, as it sets a maximum price that businesses can charge for goods and services. The law was put in place to protect consumers from excessive pricing during a time of crisis.

In 1989, Hurricane Hugo Devastated Charleston, South Carolina, Leaving Residents