Question

Suppose that a hurricane hits both North Carolina and South Carolina. North Carolina has severe price-gouging laws in place while South Carolina has none. Both states have a shortage of ice. Which state will recover from its ice shortage more quickly?

a. North Carolina will recover more quickly because the anti-gouging laws create incentives to invest in ice production.
b. North Carolina will recover more quickly because prices can adjust to make businesses willing to invest in ice production.
c. South Carolina will recover more quickly because the anti-gouging laws create incentives to invest in ice production.
d. South Carolina will recover more quickly because prices can adjust to make businesses willing to invest in ice production.

Answer 1

Answer and Explanation:

d. South Carolina will recover more quickly because prices can adjust to make businesses willing to invest in ice production.