Imposes binding price ceiling on competitive market

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When the government imposes a binding price ceiling on a competitive market, a shortage of the good arises, and sellers must ration the scarce goods among the large number of potential buyers. When OPEC raises the price of crude oil in world markets and therefore causes gasoline prices to rise significantly, would a government-imposed price ceiling hurt or help the driving public in the US? Provide specific examples to support your answers.

Reference no: EM131194950

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