People often complain about price gouging after a disaster such as a hurricane. Suppose the government successfully prevented price increases due to the disaster. We would expect
A) reconstruction to take longer because the quantity supplied of new materials would increase more slowly.
B) reconstruction to take less time because the demand for materials would increase faster.
C) reconstruction never to occur.
D) reconstruction to take less time because the government could rebuild more quickly when people are not in the way.

Question

Quizplus · Accepted Answer

If the government prevents price increases after a disaster, the quantity supplied of new materials may increase more slowly because suppliers are not incentivized to bring additional supplies to the affected area. As a result, reconstruction may take longer due to a lack of available materials.

People Often Complain About Price Gouging After a Disaster Such