Prohibiting Price Increases in Situations of True Scarcity

question 49

Multiple Choice

Prohibiting price increases in situations of true scarcity

• A)prevents the market mechanism from reallocating resources more efficiently.
• B)discourages production.
• C)may lead to extreme shortages of vitally needed products.
• D)All of the above are correct.

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Definitions:

Clothing Market

The economic sector or industry that deals with the manufacture, distribution, and sale of clothing and apparel.

Blu-ray Players

Electronic devices designed to play Blu-ray discs, providing high-definition video and audio playback.

Law of Demand

A principle stating that, ceteris paribus, there is an inverse relationship between the price of a good or service and the quantity of it that consumers are willing to purchase.

Quantity Purchased

The total number of units bought of a particular good or service.