Which of the Following Is a Result of Government Price

question 5

Multiple Choice

Which of the following is a result of government price controls?

• A)Some people win and some people lose.
• B)Price controls benefit poor consumers but harm producers and wealthy consumers.
• C)Price controls increase economic efficiency.
• D)The deadweight loss from price ceilings is greater than the deadweight loss from price floors.

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Definitions:

Long-Run

A time period in which all factors of production and costs are variable, allowing for the adjustment of all inputs.

Normal Profit

A rephrased definition: The minimum earning potential that keeps a firm operating in a competitive market, synonymous with break-even profitability.

Downward-Sloping Demand

A concept in economics that illustrates how the quantity demanded of a good decreases as its price increases, assuming all other factors remain constant.

Monopolistic Competitor

A market structure in which many firms sell products that are similar but not identical, allowing for competition on factors other than price.