11) People often complain about price gouging after a disaster such as a hurricane. Suppose the government successfully prevented price increases due to the disaster. We would expect
A) reconstruction to take longer because the quantity supplied of new materials would increase more slowly.
B) reconstruction to take less time because the demand for materials would increase faster.
C) reconstruction never to occur.
D) reconstruction to take less time because the government could rebuild more quickly when people are not in the way.
A) reconstruction to take longer because the quantity supplied of new materials would increase more slowly.
A) reconstruction to take longer because the quantity supplied of new materials would increase more slowly.
To answer this question, let's analyze the situation step by step:
First, we need to understand what price gouging means. Price gouging refers to a situation where sellers increase the prices of goods or services to an unfair or excessive level, taking advantage of a sudden increase in demand or a limited supply, such as what happens after a disaster like a hurricane.
The question states that the government successfully prevented price increases due to the disaster. This means that sellers are not allowed to raise prices, even though there is an increased demand for materials due to the reconstruction efforts.
Given this information, let's evaluate each answer choice:
A) Reconstruction to take longer because the quantity supplied of new materials would increase more slowly.
If prices are not allowed to increase, it might discourage suppliers from bringing new materials to the market. As a result, the quantity of supplied materials could potentially increase at a slower pace, which would slow down the reconstruction process. This choice could be a possible answer.
B) Reconstruction to take less time because the demand for materials would increase faster.
Since demand for materials is higher after a disaster like a hurricane, preventing price increases might encourage more people to buy and use the available materials. However, without an increase in prices, suppliers might not have enough incentives to produce and supply materials at a faster pace. So, this choice is less likely to be correct.
C) Reconstruction never to occur.
This choice seems unlikely because even if prices are kept under control, the need for reconstruction after a disaster is undeniable. Therefore, it is unlikely that reconstruction would never occur.
D) Reconstruction to take less time because the government could rebuild more quickly when people are not in the way.
This choice is unrelated to the issue of price gouging. It suggests that the government can rebuild more quickly if people are not in the way, but it does not address the impact of preventing price increases on the availability of materials.
Based on the analysis, the most likely answer is A) Reconstruction to take longer because the quantity supplied of new materials would increase more slowly. By preventing price increases, the government may unintentionally discourage suppliers from quickly meeting the increased demand for materials, leading to a slower reconstruction process.