To the extent that a governmental price control succeeds in affecting price, it can be expected to lead to a corresponding:
A)reduction in the volume of sales only if the price is forced down.
B)reduction in the volume of sales if the price is forced down and an increase in the volume of sales if the price is forced up.
C)decrease in the volume of sales whether the price is forced up or down.
D)increase in the volume of sales whether the price is forced up or down.

Question

To the extent that a governmental price control succeeds in affecting price, it can be expected to lead to a corresponding:
A)​reduction in the volume of sales only if the price is forced down.
B)​reduction in the volume of sales if the price is forced down and an increase in the volume of sales if the price is forced up.
C)​decrease in the volume of sales whether the price is forced up or down.
D)​increase in the volume of sales whether the price is forced up or down.

Quizplus · Accepted Answer

When a governmental price control succeeds in affecting price, it can lead to a decrease in the volume of sales whether the price is forced up or down. This is because price controls distort the market by preventing prices from reaching their equilibrium level, leading to supply and demand imbalances. As a result, either an excess supply or an excess demand is created, which ultimately leads to a decrease in the volume of sales.

To the Extent That a Governmental Price Control Succeeds in Affecting