Government-Imposed Quantity Restrictions

Multiple Choice

Government-imposed quantity restrictions

A) generate a higher price for the good than would prevail under freely competitive markets.
B) generate a lower price for the good than would prevail under freely competitive markets.
C) does not affect the price of the good because quantity restrictions always ban sale of the good completely.
D) can cause prices to either be higher or lower, but always cause excess quantities supplied to develop.