How are the short-run consequences of price ceilings on bread magnified in the long run? correct answer(s) in the long run, these products become increasingly harder to find. in the long run, bread consumers will demand more of the bread offered in the black market, which will increase the illegal price for the good. in the long run, the price ceiling will no longer exist as the government is forced to abolish it. in the long run, bread consumers will choose substitutes to the expensive bread offered in the black market. incorrect answer(s)
A) The COSTS for ingredients may rise, so that the firm cannot produce a profit at the value-priced amount.
Value pricing strategies usually work because consumers always like good offers and what better offer than a cheap price. But for any company to be able to sell at very low prices, the inputs they use including labor, materials and capital must be cheap also. That is the reason why McDonald's pays a low salary and they have to buy the cheapest possible ingredients.
If the price of any of their inputs increases significantly, then they will start losing money if they keep their prices low. If we want to pay $1 for a hamburger, then we cannot expect it to be made with the best ingredients available or by the best paid chefs in the world.
The correct answer is the option B: is the maximun price that can legally be charged.
To begin with, the concept known as "price ceiling" in the economics field refers to the practice that the government uses in order to establish a maximun price that is the one that can be legally charged to the consumers regarding certain products. This policy comprehends an instrument for the government that it uses it with the purpose to guarantee particular products or services that might be essential to the society so therefore the people can buy it.