When the government imposes price floors or price ceilings, A. everyone wins, goods and services distribution is more just, and there is a loss of economic efficiency. B. everyone wins, goods and services distribution is more just, and there is an increase in economic efficiency. C. some people win, some people lose, and there is an increase in economic efficiency. D. some people win, some people lose, and there is a loss of economic efficiency.

Question

Social Studies

Natalee Petersen

16 February, 07:30

When the government imposes price floors or price ceilings, A. everyone wins, goods and services distribution is more just, and there is a loss of economic efficiency. B. everyone wins, goods and services distribution is more just, and there is an increase in economic efficiency. C. some people win, some people lose, and there is an increase in economic efficiency. D. some people win, some people lose, and there is a loss of economic efficiency.

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Answers (1)

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Charlee Mathews · Answer 1

D. some people win, some people lose, and there is a loss of economic efficiency.

Explanation:

When the government determines price floors or price ceilings, it generates sudden changes in the region's economy, because the government determines a specific price where the price of goods and services can be neither higher nor lower. In this scenario, price floors do not reach equilibrium and may lead to excess demand and shortages of products and services. While price ceilings are also not balanced and result in an excess of offers which generates waste of products and services.

When the government determines that this happens, some people win, others lose, but what can be sure is that in this scenario a loss of economic efficiency occurs.