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A Government Currently Uses Price Controls to Hold Down the Price

Question 84

Multiple Choice

A government currently uses price controls to hold down the price of zinc, an exhaustible resource.If price controls are removed,


A) production of zinc will probably fall.
B) zinc mines with high marginal cost of production will probably stop producing.
C) consumers of zinc will probably want substitutes for zinc.
D) income will probably be redistributed from zinc producers to zinc consumers.

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