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Suppose a major hurricane knocks out the water and electricity infrastructure of a large coastal city, causing sudden shortages in water and generators and accompanying
Suppose a major hurricane knocks out the water and electricity infrastructure of a large coastal city, causing sudden shortages in water and generators and accompanying price spikes in these goods. What might be an appropriate governmental response to this emergency? incentives to providers of these goods to increase supply price floors above the initial equilibrium prices, to stimulate increased supply subsidies to consumers to purchase affected items price ceilings for affected goods, so that prices remain at their original levels
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