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) the market price does not reflect the costs of production.
B) people are unable to determine their preferences at the high or low price.
C) producers are able to produce less efficiently.
D) consumers no longer have incentive to spend their income efficiently.
E) All of these responses are correct.