Friday, February 15, 2013

Price Ceilings and Shortages

As predicted in the supply and demand model, price ceilings (legal restrictions on how high the price a good or service can be set) will result in shortages.  Here is an (unfortunate) example of just that in Venezuela as reported by the New York Times.

Here is my blog on this earlier using a different media source.

More Venezuelan shortages - this time due to price controls on coffee from the Wall Street Journal.

Are you noticing a pattern?

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