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As a response to the hurricane situation the government of lowlands decided to pass a no price gouging law that sets a legal upper limit

As a response to the hurricane situation the government of lowlands decided to pass a "no price gouging law" that sets a legal upper limit on the price of bottled water. This limit is binding, i.e. it is below the new and higher price of bottled water. As a consequence of this law, (choose 2)

- Bottled water firms in highlands have a lower incentive to shift water to lowlands

- Bottled water firms in highlands have a higher incentive to shift water to lowlands

- The price of bottled water in highlands rises

- The price of bottled water in highlands fall

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