After Hurricane Katrina damaged many U.S. gasoline refineries in 2005, the price of gasoline shot up around the country. The Federal Trade Commission announced that it would investigate price gouging-charging "too much"-and - several members of Congress called for price controls on gasoline. Had they been imposed, what effect would price controls have had? Who would have benefited, and who would have been harmed by the controls? Use a supply-and-demand diagram to illustrate your answers. p. $ per gallon Price controls on gasoline would have P1 O A. resulted in a shortage because demand would have exceeded supply. OB. benefited all consumers because gas prices would have been lower. OC. benefited all consumers because there would have been no surpluses. D. resulted in a market equilibrium because gas would have been affordable. O E. resulted in a shortage because refiners would have shut down their plants in protest. Q. quantity of gasoline
After Hurricane Katrina damaged many U.S. gasoline refineries in 2005, the price of gasoline shot up around the country. The Federal Trade Commission announced that it would investigate price gouging-charging "too much"-and - several members of Congress called for price controls on gasoline. Had they been imposed, what effect would price controls have had? Who would have benefited, and who would have been harmed by the controls? Use a supply-and-demand diagram to illustrate your answers. p. $ per gallon Price controls on gasoline would have P1 O A. resulted in a shortage because demand would have exceeded supply. OB. benefited all consumers because gas prices would have been lower. OC. benefited all consumers because there would have been no surpluses. D. resulted in a market equilibrium because gas would have been affordable. O E. resulted in a shortage because refiners would have shut down their plants in protest. Q. quantity of gasoline
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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