Question

08. Under price control, regulated price is fixed --------- equilibrium price.
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Answer 1

Explanation:

Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of goods even during shortages, and to slow inflation, or, alternatively, to ensure a minimum income for providers of certain goods or to try to achieve a living wage. There are two primary forms of price control: a price ceiling, the maximum price that can be charged; and a price floor, the minimum price that can be charged. A well-known example of a price ceiling is rent control, which limits the increases in rent. A widely used price floor is minimum wage (wages are the price of labor). Historically, price controls have often been imposed as part of a larger incomes policy package also employing wage controls and other regulatory elements.

WWI poster of the United States Food Administration

Although price controls are widely used by governments, economists usually agree that price controls do not accomplish what they are intended to do and are generally to be avoided.[1] For example, nearly three-quarters of economists surveyed disagreed with the statement, "Wage-price controls are a useful policy option in the control of inflation."[2

Answer 2

Answer:

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