Answer to Question #64008 in Economics for Faisal

Question

Suppose that government places a price ceiling on gasoline which is below the equilibrium price of gasoline Which of the following mechanisms would we observe being used to ration the available amount of gasoline?
a. Gasoline allocated on a first come first serve basis
b. Gasoline allocated according to sellers preferences
c. Gasoline bought and sold on a black market
d. All of the above are possible
Kindly tell which is right answer and why

Answer 1

c. Gasoline bought and sold on a black market