Following the devastation of Hurricane Hugo, Charleston, South Carolina was cut off from the outside world and without electricity.Prices for bagged ice rose by 1,000 percent and electric generators by 300 percent and at least one tree removal firm charged $4,000 to cut up a tree.City government responded by passing 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 prohibiting price "gouging" is an example of a price ceiling, which is a government-imposed limit on how high a price can be charged for a good or service in order to protect consumers from exploitation during a crisis or shortage.

Following the Devastation of Hurricane Hugo, Charleston, South Carolina Was