Which of the following statements is true?
A) Price controls strengthen the functioning of the invisible hand.
B) Price controls weaken the functioning of the invisible hand.
C) Price controls always benefit buyers and make sellers worse off.
D) Price controls always benefit sellers and make buyers worse off.

Question

Quizplus · Accepted Answer

Price controls, such as price floors and price ceilings, disrupt the natural balance of supply and demand and can lead to market inefficiencies. The invisible hand refers to the idea that the market will naturally self-regulate, but price controls interferes with this process by distortions in the market. Therefore, price controls weaken the functioning of the invisible hand.

Which of the Following Statements Is True