Question

Why does a government place price ceilings, such as rent control, on some essential goods?

a. to prevent the development of a black market
b. to encourage an increase in supply of necessary items
c. to limit the impact of equilibrium pricing
d. to help reduce demand for these goods

Answer 1

The correct answer is letter C. The reason why a government place price ceilings, such as rent control, on some essential goods in order "to keep the goods from becoming too expensive." So far, from the choices, the one that is nearer is "to limit the impact of equilibrium pricing."