The presence of a price control in a market for a good or service usually is an indication that

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The presence of a price control in a market is usually an indication that policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers. Price controls are put in place to protect consumers from paying excessively high prices or to protect producers from receiving unfairly low prices. This indicates that policymakers believed there was some sort of market failure occurring, and they intervened to correct it. Choices A and B do not necessarily indicate the need for price controls, as there could be other reasons for insufficient production or a lack of equilibrium price. Choice D is not necessarily true, as price controls can often result in their own set of problems and inequities.

The Presence of a Price Control in a Market for a Good