Define shortages occur when price controls are in effect, Microeconomics

Assignment Help:

Why is it true that shortages usually occur mainly when price controls are in effect?

In the nonexistence of price controls the shortage generally goes away quickly because prices are bid up to remove the excess demand. But with price controls in effect the shortage generally persists. This helps describe why we generally only see long lines in effect while the government imposes a price ceiling like it did throughout the 1970s so-called gas crisis.

Related Discussions:- Define shortages occur when price controls are in effect

Consumer and producer surplus, analyse the rise and fall in the price under...

analyse the rise and fall in the price under market equillibrium situation?

Define the policies of education - US Economy, Define the Policies of Educa...

Define the Policies of Education Universal education--particularly universal education of girls--pays a two-fold benefit. Investments are more likely to be productive with a be

Money demand function, what are the values of real money supply and the cur...

what are the values of real money supply and the current price level

Profits, explain abnormal profits and normal profits

explain abnormal profits and normal profits

Economics, Calculate point elasticity of demand for demand function Q=10-2p...

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

Demand functions for one product facing two markets, Suppose a firm faces t...

Suppose a firm faces two markets for the same product. In market A, the demand function is PA=60-QA, while in market B the demand function is PB=36-0.5QB. The total cost function i

Calculate the expected value, 1) Investments 1A) What are the ...

1) Investments 1A) What are the two components to total return ? What does expected value measure? What does standard deviation measure? How can each result be

Chapter 7, a firm has fixed costs of $60 and variable costs as indicated at...

a firm has fixed costs of $60 and variable costs as indicated at the bottom of this page. complete the table and check your calculations

Oppurtunity cost, 1. Assume that Malaysia can produce cencaluk at 25 bottle...

1. Assume that Malaysia can produce cencaluk at 25 bottles per worker and belacan at RM5 per worker. Assume that Indonesia can produce 10 bottles of cencaluk per worker and 20 pack

AREC 1, Equation (1) gives a hypothetical demand curve for hybrid vehicles ...

Equation (1) gives a hypothetical demand curve for hybrid vehicles in the United States during the year 2000, where Q is the quantity demanded and P is the price. Equation (2) giv

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages