Business, 11.04.2020 02:42 shahidcade2721

The mayor of Stockville is seeking reelection and isn’t buying into the health food hype. He believes that french fries are necessary for the happiness of his citizens, but the fast-food restaurants in his city are charging too much for their products. In an effort to shore up election support, the mayor institutes a price ceiling on french fries. Within two years, half of the fast-food restaurants close in Stockville. What is the likely cause?

a. A neighboring town is subsidizing french fry producers.
b. The price ceiling generated long-run economic losses.
c. A spike in french fry consumption resulted in a long-run decline in health, drastically reducing demand for fast food.
d. A french fry price ceiling without a proportional hamburger price floor created an untenable production balance.
e. The price ceiling generated long-run economic profits.

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The mayor of Stockville is seeking reelection and isn’t buying into the health food hype. He believe...

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