Which of These Statements Explains Why Price Ceilings Result in Lost

question 250

Multiple Choice

Which of these statements explains why price ceilings result in lost gains from trade?

• A) Buyers and sellers want to trade, but the threat of fines or jail time prevents them from doing so.
• B) Sellers want to trade, but buyers prefer the lower prices.
• C) Buyers want to trade, but sellers are indifferent at the lower prices.
• D) Neither buyers nor sellers want to trade subject to a price ceiling resulting in lost gains from trade.

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Definitions:

Percentage

A portion of a whole expressed as a number between 0 and 100 rather than as a fraction.

Hectares

A metric unit of square measurement equal to 10,000 square meters, commonly used in agriculture and land measurement.

Land

The part of the earth's surface that is not covered by water, often considered in terms of its ownership or use.

Purchase

The act of buying goods or services, often involving a legal transaction between a buyer and a seller.