What are the problems associated with price regulation?
What will be an ideal response?
The main problem with price regulation is that it reduces firms' incentive to minimize costs because with price regulation a firm is guaranteed to make zero economic profits. Another problem associated with price regulation is that because firms earn fewer profits, the incentive to innovate and produce new goods and services is greatly reduced.
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"In the loanable funds market, when there is a shortage of funds, the real interest rate will increase." Explain whether the previous statement is correct or not
What will be an ideal response?
Why might IS policies make a country likely to incur a large foreign debt?
What will be an ideal response?
From the end of World War II until the present, the price level has
a. slowly fallen over time. b. fluctuated around a downward trend. c. remained stable throughout the period. d. fluctuated around an upward trend.
A Lorenz curve plots
A. the distribution of income. B. unemployment and inflation. C. job openings and the unemployment rate. D. the distribution of labor supply.