Question 32 (2.5 points) Price controls will tend to cause misallocation of production resources or inputs because production supply (or opportunity cost) no longer corresponds to market equilibrium price. markets do not work without help from government price control policies. producers no longer have incentive to be profitable. consumers no longer have incentive to spend their income efficiently.

          Question 32 (2.5 points)
Price controls will tend to cause misallocation of production resources or inputs because
production supply (or opportunity cost) no longer corresponds to market equilibrium price.
markets do not work without help from government price control policies.
producers no longer have incentive to be profitable.
consumers no longer have incentive to spend their income efficiently.

Question 32 (2.5 points)
Price controls will tend to cause misallocation of production resources or inputs because
production supply (or opportunity cost) no longer corresponds to market equilibrium price.
markets do not work without help from government price control policies.
producers no longer have incentive to be profitable.
consumers no longer have incentive to spend their income efficiently.

Added by Jose W.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Umar Sohail Qureshi

Step 1

Price controls are government policies that set a maximum or minimum price for a particular good or service. In this case, we are discussing price controls that set a maximum price, also known as price ceilings. Show more…

Show all steps

Thanks for your feedback!

Price controls will tend to cause misallocation of production resources or inputs because production supply (or opportunity cost) no longer corresponds to market equilibrium price. Markets do not work without help from government price control policies. Producers no longer have an incentive to be profitable. Consumers no longer have an incentive to spend their income efficiently.