Reference no: EM132312317

In the 1970s, there was a shortage of gasoline due to (depending upon whom you believe) OPEC restricting crude oil output and/or government imposition of price ceilings. These price ceilings "prevented" gas stations from charging above a certain price per gallon for gasoline. To "control" the crisis, laws specified that you could only buy gas on certain days, or you could only buy a certain number of gallons. People waited in line for hours for the chance to buy gasoline. The price ceilings intended to keep the price of gasoline low; how can you argue that, despite the price ceiling, that the cost to purchase gasoline was still high?

Select one:

a. Even though the price ceiling kept prices and costs low for American consumers, the cost to OPEC countries of exporting oil was too low to be profitable.

b. There is a high opportunity cost in having to wait hours in line or to coordinate your schedule to make it to the gas station on the correct day.

c. The price ceiling kept the price of gasoline too high, so it was unusually difficult for gas station owners to control the excess supply that they had.