When the government imposes price floors or price ceilings, A. some people win, some people lose, and there is a loss of economic efficiency. B. some people win, some people lose, and there is an increase in economic efficiency. C. everyone wins, goods and services distribution is more just, and there is a loss of economic efficiency. D. everyone wins, goods and services distribution is more just, and there is an increase in economic efficiency.

Question

Bryan Fitzgerald

Business

2 August, 12:32

When the government imposes price floors or price ceilings, A. some people win, some people lose, and there is a loss of economic efficiency. B. some people win, some people lose, and there is an increase in economic efficiency. C. everyone wins, goods and services distribution is more just, and there is a loss of economic efficiency. D. everyone wins, goods and services distribution is more just, and there is an increase in economic efficiency.

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Answers (1)

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Kenyon Calhoun · Answer 1

The answer is: A) some people win, some people lose, and there is a loss of economic efficiency.

Explanation:

When the government imposes a price ceiling, some consumers win since they buy cheaper products (lower than equilibrium price) but suppliers lose. Inf the government decides a price floor is better, then customers will lose and some suppliers will win (prices are higher than equilibrium price).

Both price ceilings and price floors cause deadweight loss, decreasing economic efficiency.