Which of the following is true?
i.A price ceiling is inefficient but fair.
ii.A price floor is inefficient and unfair.
iii.A price support increases the quantity produced.
A) Only i
B) Only ii
C) Only iii
D) i and ii
E) ii and iii

Question

Quizplus · Accepted Answer

Option i is incorrect because a price ceiling can be both efficient and fair if it is set at the market price. Option iii is incorrect because a price support does not necessarily increase the quantity produced, it just ensures that the price does not fall below a certain level. Option ii, however, is correct as a price floor is inefficient because it leads to a surplus of goods (quantities supplied exceed quantities demanded) and unfair because it benefits suppliers at the expense of consumers.

Which of the Following Is True