The experience of 1971 price ceilings on oil taught us that a price ceiling curbs technological research and development in an activity where
A) foreign competition is great.
B) supply exceeds demand.
C) employment is rising.
D) the risk is great.
E) equilibrium prices are falling.

Question

Quizplus · Accepted Answer

Price ceilings can reduce the incentive for technological research and development in activities where the risk is great, as they limit potential profits and returns on investment.

The Experience of 1971 Price Ceilings on Oil Taught Us