Chapter 5, Problem bWYWL

To determine

To explain:

How price and quantity controls create problems and can make a market inefficient?

Concept Introduction:

Price control: When there is disequilibrium in the economy whether a shortage or surplus the government has to control the prices to attain the equilibrium. For this the government uses variety of price control the main of them is price ceiling and price floor.

Quantity Control: The quantity control of the government means the government puts a restriction on certain types of goods and services that are bought and sold in the market.