Question

Price ceilings will likely result in the development of black markets. increase production as producers respond to higher consumer demand at the low ceiling price. increase the volume of transactions as we move along the demand curve. result in the accumulation of surpluses.

Answer 1

Answer: result in the development of black markets.

Explanation:

Price ceilings are limits on the price that can be charged for a good or service. This means that suppliers will be unable to charge a certain price regardless of the cost incurred to produce that good.

Supplier usually respond to this by producing less goods and services which would leave a shortage in the market. This shortage will result in a black market where the prices the good will then be sold at will be higher than the price ceiling as people try to get the now relatively scarce goods and services.