Question

A price ceiling is not necessarily in the public's best interest because

Question 6 options:

a)

It can make otherwise available goods not available because of the low price.


b)

It's too "laissez-faire" for most people's taste.


c)

It always makes prices increase.


d)

All of the above.

Answer 1

It can make otherwise available goods not available because of the low price.

Step-by-step explanation:

Price Ceiling refers to a regulation made by government to put a "maximum price" for a certain type of product.

One benefit of price ceiling is to prevent the producers from imposing high profit margin that couldn't be afforded by the customers.

But, there's a downside. To produce product with higher quality, producers typically need to sacrifice higher cost to create it. They need to increase the price of the products to make a return from that higher quality products. With price ceilings, many producers wouldn't be able to make such quality improvement.