Suppose a hurricane hits Florida, causing widespread damage to houses and businesses.The governor of Florida places price ceilings on all building materials to keep the prices reasonable.Which of the following is the most likely result?

Question

Quizplus · Accepted Answer

When price ceilings are placed on building materials, it reduces the incentives for suppliers to provide more of those materials, resulting in a decreased supply. Additionally, it creates a situation where demand for the materials exceeds supply, leading to shortages. This means that fewer people will be able to purchase the materials needed to repair their homes and businesses, slowing down the recovery from the storm.

Suppose a Hurricane Hits Florida, Causing Widespread Damage to Houses