Which of the following is a result of government price controls?
A)Some people win and some people lose.
B)Price controls benefit poor consumers but harm producers and wealthy consumers.
C)Price controls increase economic efficiency.
D)The deadweight loss from price ceilings is greater than the deadweight loss from price floors.

Question

Quizplus · Accepted Answer

Government price controls lead to winners and losers in the market. This is because some consumers benefit from lower prices, while producers may face decreased revenue and may even exit the market if prices are set too low. Similarly, when there is a price floor, some producers benefit from higher prices, while consumers may face higher costs or reduced access to goods if supply is restricted. Thus, there is a tradeoff between the benefits and costs of price controls.

Which of the Following Is a Result of Government Price