After hurricane Andrew hit Florida and Louisiana, consumers expressed outrage at the high prices being charged for chainsaws, generators and bottled water. If government followed...

      

After hurricane Andrew hit Florida and Louisiana, consumers expressed outrage at the high prices being charged for chainsaws, generators and bottled water. If government followed consumers’ demands and imposed price ceilings in these markets, what is likely to be the result?

  

Answers


chris
If the government enacted price ceilings, they could prevent the price of chainsaws, generators and bottled water from rising above a certain set level ‘ceiling’. The producers are likely to bind themselves to the ceiling price or lower.
chris10 answered the question on March 27, 2018 at 17:15


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