Legal Limits on Prices Will Tend to Cause Misallocation of Resources

Multiple Choice

Legal limits on prices will tend to cause misallocation of resources because

A) production (or opportunity) cost no longer corresponds to market price.
B) people are unable to determine their preferences at the high or low price.
C) producers no longer have incentive to be profitable.
D) consumers no longer have incentive to spend their income efficiently.
E) All of the above are correct.