Question:

Why do economists hate price controls?

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Why do economists hate price controls?

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3 ANSWERS


  1. Something about free market trading, I think.


  2. Price controls can corrupt the true value of an item...however sometimes they're needed.  When Enron charged California 1000 dollars for each watt of power...when it usually ran around 35 dollars to 50 at the most...that was a bit absurd.

  3. Price controls distort natural market conditions.

    Controls on prices distort the allocation of resources. Price ceilings, which prevent prices from exceeding a certain maximum, cause shortages. Price floors, which prohibit prices below a certain minimum, cause surpluses.

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