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Price Controls

MARCH 16, 2013

Price control is mandated certain price level per unit. Governments or private entities might enforce price controls on a variety of goods and services including residential rents, food stuffs, wages for labor, and many more. Price controls can dictate either minimum or maximum prices. When the government enforces a minimum price, it can create a surplus of a good or service if that price is higher than the market price. Likewise, if the government enforces a maximum price that is lower than the market price, it will create a shortage of a good or service. In the former case, the government might initiate a program to buy the excess. In the latter case, the government might initiate a rationing program that limits consumer access to said goods and services. 

 

 

Paul Cwik - Problems and Prices

 

Anthony Carilli - Austrian Economics: Praxeology, Supply, and Demand

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