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 pricegouging—charging"toomuch"—andseveral members of Congress called for price controls on gasoline. What would have been the likely effect of such a law had it been passed?Part 2Price controls on gasoline would havePart 3 A.benefited all consumers because gas prices would have been lower. B.benefited allconsumersbecause there would have been nosurpluses. C.resulted in a market equilibrium because gas would have been affordable. D.resulted in a shortage because refiners would have shut down their plants in protest. E.resulted in a shortage because demand would have exceeded suppl

Equilibrium price is the price at which quantity demanded equals quantity supplied and the market…

Answered: After Hurricane Katrina damaged many…

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 9PA

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Part 2

Price controls on gasoline would have

Part 3

benefited all consumers because gas prices would have been lower.

benefited all

consumers

because there would have been no

surpluses.

resulted in a market equilibrium because gas would have been affordable.

resulted in a shortage because refiners would have shut down their plants in protest.

resulted in a shortage because demand would have exceeded suppl

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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