Government price controls make communication of information between buyers and sellers more effective.

Question

Quizplus · Accepted Answer

Government price controls can lead to market inefficiencies, such as shortages or surpluses, which can make communication of information between buyers and sellers less effective. Price signals are distorted and may not accurately reflect supply and demand dynamics, leading to a mismatch between what buyers want and what is available from sellers. This can result in decreased market transparency and greater uncertainty, hindering the efficient allocation of resources.

Government Price Controls Make Communication of Information Between Buyers and Sellers