Question

When several hurricanes hit Florida in 2004, a number of local governments imposed price controls that prevented sellers from raising their prices for badly needed products like plywood and generators. In the areas where the controls were imposed, they resulted in:

Answer 1

Answer:

Lower supply and a shortage

Explanation:

In cases of emergency the prices connected with some good normally increases, even if the good isn't produced in the affected area. The costs of transport, logistic, storage and selling e.g, increases because of shortage of all other goods, reflecting in a chain effect. When a price is set below the equilibrium price, the quantity supplied will be lower than the quantity demanded, by consequence the maximum price may lead a lower supply and a shortage.