Question Description
Find an example of a governmental price control—either current or historic is fine. This could be a price ceiling or floor, quotas, anti-gouging laws, or other such policies. Summarize the policy. Then, explain how the policy affects the market outcome—is the price higher or lower with the policy than it would have been without the policy? What about the quantity of transactions? What other effects are there? Is there anything the government has to do in order to support the policy (other than putting the policy in place)–in other words, does the government have to take steps to ‘correct’ the surplus or shortage? What steps are those?
Who gains and who loses because of the policy? Can this help explain why the policy was enacted? Why might the government or society want the policy in place rather than letting the market decide on the price of the good or the amount of transactions that take place? Is the policy good or bad? How is it helpful and how is it harmful?
Don’t forget to cite your article!
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