Price controls:
A)always increase economic efficiency.
B)always lead to more equitable results.
C)can result in inequitable outcomes.
D)are always set below the equilibrium price.

Question

Quizplus · Accepted Answer

Price controls can result in inequitable outcomes as they can create shortages or surpluses of a good, leading to unequal distributions of that good. For example, if a price ceiling is set on rent, landlords may be less willing to rent out their properties, resulting in a shortage of available housing. This can lead to higher prices for those who are able to secure a lease or even discrimination against certain groups of renters. Similarly, a price floor that is set too high on a certain product can result in a surplus, causing some producers to lose money and potentially go out of business. Overall, price controls have the potential to create unintended consequences and inequities.

Price Controls