If price gouging is prohibited by the government so that sellers cannot suddenly raise prices,then a sudden drop in gasoline supply due to bad weather will most likely result in
A)an equilibrium in the gasoline market.
B)a surplus in the gasoline market.
C)a shortage in the gasoline market.
D)high profits for sellers.
E)a sudden increase in the gasoline supply.

Question

Quizplus · Accepted Answer

If price gouging is prohibited, then sellers cannot raise prices in response to a sudden decrease in supply. This means that consumers will continue to demand the same amount of gasoline, but with a reduced supply, there will be a shortage in the market. This shortage may cause long lines at gas stations and higher prices on the black market.

If Price Gouging Is Prohibited by the Government So That