The Main Reason Policymakers Use Price Controls Is Because

question 71

Multiple Choice

The main reason policymakers use price controls is because:

• A)they are better at coordinating economic activity than the free market
• B)they believe that in some cases the market outcome is not fair
• C)they need a reason to justify their jobs
• D)all of the above is true

---

Definitions:

Direct Materials

Raw materials that are consumed in the production process and can be directly attributed to specific products.

Production Labor

The workforce involved in the manufacturing process, whose wages are considered a direct labor cost affecting the cost of goods sold.

Direct Cost

Expenses that can be directly linked to the production of specific goods or services.

Indirect Cost

Costs that are not directly traceable to a specific product or activity, such as overhead, administration, and salaries for management.