Question

If the local government tells gas stations that they are not allowed to change the price of gas for three weeks during hurricane season, what will be the consequence?
a.Gas stations will be unable to sell all the gas they want at the temporary price ceiling price.
b. Consumers will be unable to buy all the gas they want at the temporary price ceiling price.
c. The supply curve for gas will increase and shift to the right.
d. The demand curve for gas will increase and shift to the right.
e. Equilibrium in the gas market will be achieved.

Answer 1

Answer:

The correct answer is B. Consumers will be unable to buy all the gas they want at the temporary price ceiling price.

Explanation:

At the time that the offer is recent for price control, demand can be stimulated by the existence of a more reasonable and affordable price for the consumer, so that there is an excess of demand against supply, which is It would imply that it should result in an increase in prices that should lead to an optimum level or breakeven point being reached at any given time, a situation that will not occur precisely because of price control.

By resenting the offer while increasing demand, despite the possible shortage, this shortage does not result in a price increase that would be normal, precisely due to the hand of the state that prevents free market development , since it restricts one of the factors that energizes it, which is the price.

The price of goods and services, as well as can increase or decrease the supply, can also increase or decrease demand, a game that alone should maintain a price that satisfies both consumers and producers, but when price control is introduced , only consumers will be satisfied, a situation that causes bidders to stop producing.