After a natural disaster, a binding price ceiling on bottled water will lead to:

Question

Quizplus · Accepted Answer

When a price ceiling is imposed on a good, it creates a situation where the price of the good is lower than the market price. This creates a surge in demand as people try to buy more of the good at the artificially low price. As a result, suppliers are unable to keep up with the increased demand, leading to a shortage of the good. In the case of bottled water after a natural disaster, a binding price ceiling would likely lead to a shortage of bottled water as people would try to hoard or buy more water than they actually need.

After a Natural Disaster, a Binding Price Ceiling on Bottled