Why Do Shortages Develop Under a Binding Price Ceiling

question 126

Multiple Choice

Why do shortages develop under a binding price ceiling?

• A) It encourages sellers to produce more of the product.
• B) It encourages buyers to purchase less of the product.
• C) It makes the price so low that the quantity demanded exceeds the quantity supplied in the legal market.
• D) It makes the price so low that the quantity demanded exceeds the quantity supplied on the black market.
• E) It encourages sellers to increase the quality of the products they sell,which in turn increases the quantity demanded.

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Definitions:

Kohlberg

Refers to Lawrence Kohlberg, a psychologist known for his theory on the stages of moral development in children and adults.

Self-esteem

An individual's subjective evaluation of their own worth, encompassing beliefs about oneself as well as emotional states.

Transmitted

The act of sending or conveying something from one place or person to another, especially in the context of hereditary traits or diseases, or communication signals.

Internalization

The process of integrating beliefs, attitudes, or behaviors into one's own value system or way of being.