Question

A price ceiling

a. creates market efficiency by making a good cheaper.

b. benefits all people who want to buy the good.

c. can create a black market for the good.

d. reduces search activity.

e. helps all producers by increasing the price of the good.

Answer 1

It can create a black market for the good. Typically, the black market occurs if the price ceiling is applied for a long period. This is because it creates unrest on the supply side.