Which statement about the undesirable side effects of a quantity control is NOT correct?
A)Quantity controls do not lead to deadweight loss.
B)Some mutually beneficial transactions do not occur because of quantity controls.
C)Quantity controls provide incentives for illegal activities.
D)Quantity controls cause a wedge between the demand price and supply price.

Question

Quizplus · Accepted Answer

This statement is incorrect. Quantity controls create a deadweight loss by reducing the quantity of goods that are produced and consumed, causing a misallocation of resources.

Which Statement About the Undesirable Side Effects of a Quantity