Price controlsa. always produce a fair outcome. b. always produce an efficient outcome. c. can generate inequities of their own. d. All of the above are correct

Question

Alonzo Roth

Social Studies

10 March, 00:13

Price controlsa. always produce a fair outcome. b. always produce an efficient outcome. c. can generate inequities of their own. d. All of the above are correct

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Answers (1)

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Salvador · Answer 1

C). Can generate the inequities of their own.

Explanation:

The price controls are a central element of government's economic intervention policy in which the government sets the legal minimal or maximal limit on the price of specific goods in order to ensure its affordability to consumers.

As per the question, price controls 'can generate inequities of their own in the economy' because the limitation of price to minimum or maximum by the government would create a disbalance between the demand and supply which is the key factor to maintain economic equilibrium. In this situation, either the demand would exceed the supply or the supply would exceed the demand that would promote inequity in the economy. Therefore, option C is the correct answer.