Question
Under price control, why might the shortages of oil in some local markets be much more severe than in others? A.Under price control, refineries might
Under price control, why might the shortages of oil in some local markets be much more severe than in others?
A.Under price control, refineries might not have the incentive to ship oil to cities that are further away due to higher shipping costs. So, shortages could be worse in some areas than in others.
B.Under price control, refineries have little incentives to increase production and ship oil to remote cities to meet shortages in rural areas where the demand is lower.
C.Under price control, refiners reduce supply to lower costs. The reduction in supply may hurt larger cities more.
D.Under price control, refineries have no incentive to increase production to meet shortages. Shortages could be worse in rural areas.
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