A Government Currently Uses Price Controls to Hold Down the Price

question 84

Multiple Choice

A government currently uses price controls to hold down the price of zinc, an exhaustible resource.If price controls are removed,

• A)production of zinc will probably fall.
• B)zinc mines with high marginal cost of production will probably stop producing.
• C)consumers of zinc will probably want substitutes for zinc.
• D)income will probably be redistributed from zinc producers to zinc consumers.