Price Controls Cause Resources to Be Misallocated By

question 28

Multiple Choice

Price controls cause resources to be misallocated by:

• A) distorting the signals of suppliers' willingness to supply and eliminating the incentives for demanders to pay.
• B) distorting the signals of demanders' willingness to pay and eliminating the incentives for suppliers to supply.
• C) distorting the incentives for suppliers to supply and eliminating the signals of demanders' willingness to pay.
• D) distorting the incentives for demanders to pay and eliminating the signals of suppliers' willingness to supply.

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Definitions:

Discount Period

The time frame during which a discount is offered or can be claimed.

Credit Period

The length of time that a buyer is given to pay for a purchase before interest is charged or penalties apply.

Invoice Date

The specific date on which an invoice is issued, indicating when the transaction was recorded and when payment is due.