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Generally, supporters of price controls see them as a way to reallocate wealth from producers to consumers. Economists point out that manipulating the market pr
by jsmith99 5y ago
Generally, supporters of price controls see them as a way to reallocate wealth from producers to consumers. Economists point out that manipulating the market price distorts the market by reducing producers' incentive to supply and increasing consumers' incentive to consume, leading to a less efficient outcome.
- rtpg 5y agoIt turns out that efficiency isn't the be-all and end-all of all of society! The objective is not necessarily to maximize efficiency/production/have costs be as low as possible for every product under the sun! And of course there are duals to price controls such as production subsidies that can smooth things out. And policies that can otherwise influence things. Money is fungible, after all! And thanks to taxation as a general concept, the universe of people paying for all of this is not necessarily the universe of people buying it, so it's not necessarily "the consumers pay in one way or the other".