Asked by Ysobelle Eustaquio on Jul 22, 2024

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Inefficient allocations of goods to consumers often result from:

A) price ceilings.
B) producer surpluses.
C) increases in income.
D) market transactions.

Inefficient Allocations

Situations where resources are not optimally distributed, often leading to waste or unmet potential within an economy or system.

Price Ceilings

A cap set by the government on the maximum price that can be asked for a good, service, or resource.

Producer Surpluses

The difference between the actual price a producer receives for a product and the minimum price they would be willing to accept.

  • Comprehend the principles of price ceilings and their effects on market balance.
  • Evaluate the impact of various market controls (including price ceilings, price floors, and quotas) on creating inefficiencies like deadweight losses.
  • Evaluate the effects of market interventions on consumer and producer behavior.
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CB
Claire BradburyJul 26, 2024
Final Answer :
A
Explanation :
Price ceilings can lead to inefficient allocations of goods to consumers because they artificially set the price below the market equilibrium, causing shortages and rationing. This means that some consumers who are willing and able to pay the market price are unable to obtain the goods, while others who are not as willing to pay get them instead. This can lead to a misallocation of resources and a deadweight loss to society.