Which statement(s) about price ceilings are TRUE?
I. Price ceilings cause quantity demanded to exceed quantity supplied.
II. When including time costs and bribes, consumers pay a total price in excess of the price ceiling.
III. All else equal, it is more wasteful to allocate goods based on bribes than on waiting time costs.
A) I only
B) II and III only
C) I and II only
D) I, II, and III

Question

Quizplus · Accepted Answer

Statement I is true as price ceilings lead to excess demand.
Statement II is also true since consumers may have to pay additional costs such as waiting time and bribes to obtain the good/service they want.
Statement III is a matter of opinion and cannot be verified as true or false based on economic theory alone.

Which Statement(s) About Price Ceilings Are TRUE