Prohibiting price increases in situations of true scarcity
A)prevents the market mechanism from reallocating resources more efficiently.
B)discourages production.
C)may lead to extreme shortages of vitally needed products.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Prohibiting price increases in situations of true scarcity prevents the market mechanism from reallocating resources more efficiently, discourages production, and may lead to extreme shortages of vitally needed products. Therefore, all of the above statements are correct.

Prohibiting Price Increases in Situations of True Scarcity