3 ms·
> A mismatch between supply and demand can be solved by bringing supply up or demand down. Not really. Supply and demand are curves (quantity X supplied / dema
by troad 4y ago
> A mismatch between supply and demand can be solved by bringing supply up or demand down.
Not really. Supply and demand are curves (quantity X supplied / demanded at price Y), and where they intersect is the equilibrium price. Artificially fiddling around with prices does not move the curves or where they intersect, so you can't solve anything with this - you prevent equilibrium and get deadweight loss for both the sellers and the buyers.