Which of the following is a negative consequence of price controls? Price controls inhibit the development...
Which of the following is a negative consequence of price controls?
Price controls inhibit the development of informal and black markets
Artificially low prices cause demand to outstrip supply, leading to shortages
Artificially low prices cause supply to outstrip demand, leading to surpluses
Price controls cannot be implemented effectively except in the case of public utilities
Homework Answers
Answer : Option B is correct. The negative consequence of price controls is that artificially low price causes demand to outstrip supply, leading to the shortages of good in the market place. It means that there is a decrease in the availability of good as demand has been more than supply due to minimum price and this leads to shortage.
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Which of the following is a negative consequence of price
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Price controls inhibit the development...
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