Which statement about price controls is most correct?
A) Price controls often hurt the people they are designed to help.
B) Price controls always help the people they are designed to help.
C) Price controls have minimal adverse effects.
D) Price controls make economic sense even if they have adverse effects.

Question

Quizplus · Accepted Answer

Price controls can lead to shortages, reduced quality, and black markets. For example, if the price of a good is set below its equilibrium level, there will be excess demand or a shortage, as consumers would want to buy more at the low price, while suppliers are not willing to supply as much at the lower price. This can ultimately hurt consumers by depriving them of the goods or services they wanted to purchase at the controlled price. Additionally, suppliers may cut corners or reduce quality to maintain profitability in the face of price controls. Therefore, price controls often have unintended consequences that can harm the very people they are trying to help.

Which Statement About Price Controls Is Most Correct