Which of the following statements is FALSE?
A) The rationing function of prices is not allowed to freely operate when the government imposes price controls.
B) Price controls may take the form of price ceilings or price floors.
C) Price ceilings below the equilibrium price can cause black markets to develop.
D) Rent controls are examples of price floors.

Question

Quizplus · Accepted Answer

Rent controls are examples of price ceilings, not price floors. Price floors mandate a minimum price for a good or service, while price ceilings mandate a maximum price. Rent controls often set a limit on how much landlords can charge tenants for rent, which is a price ceiling.

Which of the Following Statements Is FALSE