Reference no: EM133243970
Discussion - Price Controls
Respond to the following prompt in a post with a minimum of 250 words, then comment on at least TWO other posts. Respond to the posts indicating your agreement or disagreement with their position and why. Feel free to bring in additional references to these reply posts.
Find a current news article or video (within the past 12 months) that describes some government intervention in the economy with the intent of controlling prices. Identify the parties who benefit and those who are or will be hurt by this intervention. What unintended consequences will likely or have occurred as a result of this intervention. What is your opinion on this matter? Why? Include your thoughts and the link to the article in your post.
Post 1 Dalonna - Hello Everyone,
This article covers the governments possibility to control gas price and food which is something that hasn't been done. Economists think that the government shouldn't step in. The result of changing how much a company can charge will distort the market, cause shortages and exacerbating supply chains which can only temporarily reduce inflation and causing unintended consequence. Policymakers have shown little certain for even targeted or temporary measure even with all the pressure on the middle-class families who are feeling the prices increase more than the rich. The Federal Reserve has tried to act this year, but they have failed to tame inflation. In respect with price controls in other countries have implement it different strategies in German capital of Berlin they have limit how much rent landlords can charge tenants and in the United Kingdom regulators limit how much consumer can be charge for energy and some type of rail fares. In Hungarians Prime Minister cut the price of flour, sugar, sunflower oil, milk, pork leg and chicken breast. Economist feel the capping prices will cause company to make less produce when supply goes down and demand goes up with shortage causing inevitable results. President Joe Biden has pledged to enforce antitrust laws and crackdown on prices fixing by meat processors. Also, he has released oil from the country Strategic Petroleum Reserves in a hope to reduce energy prices. In my opinion the government isn't moving fast enough, and the inflation is getting out of control. This is causing people to steal more and commit crimes to survive. The government needs to agree on different policies to combat inflation and make the changes faster.
Post 2 Hasmik -
The term "price controls" refers to the legal minimum or maximum prices set for specified goods. Price controls are normally mandated by the government in the free market. They are usually implemented as a means of direct economic intervention to manage the affordability of certain goods and services, including rent, gasoline, and food. Although it may make certain goods and services more affordable, price controls can often lead to disruptions the market, losses for producers, and a noticeable change in quality.The consumers may or may not gain.
Governments may also intervene to control markets alongside with prices, by controlling the forces of supply and demand, and determining who can enter the market and the prices they may charge. They could also order that certain products be given priority over all others and prevent foreign direct investments from acquiring or taking control over some companies on grounds of security and public order. This may occur for security purposes, in case of emergencies, as well in the case of 'Market failure' as the free market is not always able to achieve equilibrium and allocation efficiency.