When a price ceiling such as a rent control is substituted for market allocation:
A)it is not possible to tell if the goods get allocated optimally.
B)the goods get allocated to consumers who most desire them.
C)the goods get allocated to the poor.
D)the goods get allocated to consumers who least desire them.

Question

Quizplus · Accepted Answer

When a price ceiling is in place, it distorts market signals and incentives, which may lead to shortages, surpluses, or inefficient allocation of goods. It is difficult to determine whether the goods are getting allocated optimally because the price is no longer reflecting the supply and demand for the good.

When a Price Ceiling Such as a Rent Control Is