Read the following statements - Assertion (A) and Reasoning (R):
Assertion: Price ceiling leads to black marketing.
Reasoning: Price ceiling leads to shortage.

Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A).

The correct answer is option 1: Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A).

Assertion (A): "Price ceiling leads to black marketing." This is true because when the government sets a maximum price (price ceiling) below the equilibrium price, it creates a shortage in the market. Due to this shortage, some sellers may engage in black marketing, selling goods at higher illegal prices outside the controlled market.

Reasoning (R): "Price ceiling leads to shortage." This is true because at a price below the equilibrium price, demand increases while supply decreases, causing a shortage of goods.

Is Reasoning (R) the correct explanation for Assertion (A)? Yes, because the shortage created by the price ceiling forces consumers to compete for limited goods, leading to black markets where people are willing to pay higher prices to obtain the goods.