Really!! price Controls this day and age, let me reiterate succinctly what we all know..
Price controls can take the form of:
Maximum Prices – Price can’t rise above a certain level. This can reduce prices below the market equilibrium price. The advantage is that it may lead to lower prices for consumers.
The disadvantage is that it will lead to lower supply. There will also be a shortage, demand will exceed supply; this leads to waiting lists and the emergence of black markets as people try to overcome the shortage of the good and pay well above market price.
Minimum Prices:
Minimum prices are used to give producers a higher income. They are used to increase the income of farmers producing goods.
The disadvantage of Minimum Prices
* Higher prices for consumers
* Higher tariffs necessary on imports
* May encourage oversupply and inefficient.
Generally price controls distort the working of the market and lead to over supply or shortage. They can exacerbate problems rather than solve them. Nevertheless there may be occasions when price controls can help for example, with highly volatile agricultural prices. However that said with the history of our leaders, i don't see this going anywhere..albeit i can see what the @deal is saying, we need a new model of economic democracy which ensures that the gova is accountable for long-term stability, not just short term returns but again this brings about the million dollar question " Is it time for a democratic control of the markets" - Aye or Naye??
The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday's logic.