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So price controls, as in the concept, does not cause shortages. Bad implemented price controls contribute to shortages. It’s not the fact that there are pric

So price controls, as in the concept, does not cause shortages. Bad implemented price controls contribute to shortages. It’s not the fact that there are price controls that are cussing the shortage it’s the implementation of them in the present case.

baggy_trough 3y ago
That is not correct. A price control that sets the price to the market price will do nothing. If it sets it beneath the market price, a supply shortage will result.
- skhunted 3y ago
  Then we agree that price controls can be implemented that don’t cause shortages. A price control that sets a price where a sufficient number of people are willing to perform a service or make a good do not cause shortages. Such a control in such a circumstance prevents companies from having too much pricing power over essential services. Thus they do accomplish something in such a case.
  - baggy_trough 3y ago
    If I set the maximum wage to one million dollars an hour, it would in some sense be a price control, but it would have no effect. I agree that ineffective price controls that are set above the market price do not cause shortages. Price controls that have an effect, which are those beneath the market price, cause shortages.
    - skhunted 3y ago
      Electricity is an essential good in the present era. There is generally no competition on the provider. As such the the energy company has a large amount of pricing power. Price controls, when done properly in such a situation, give the energy company enough profit to make it a worthwhile endeavor to be a provider for enough people whilst also preventing what is popularly referred to as price gouging. Price controls can be a good thing and when done properly allow for providers to make a sufficient amount of profit to be worthwhile for enough people whilst preventing gouging. Preventing "gouging" is the effect of capping the amount the of profit. Regulating the price that utility companies can charge has not resulted in shortages. For the most part, regulating how much insurance companies can charge has not resulted in shortages. Price controls, in and of themself do not cause shortages.

baggy_trough 3y ago

That is not correct. A price control that sets the price to the market price will do nothing. If it sets it beneath the market price, a supply shortage will result.

skhunted 3y ago
Then we agree that price controls can be implemented that don’t cause shortages. A price control that sets a price where a sufficient number of people are willing to perform a service or make a good do not cause shortages. Such a control in such a circumstance prevents companies from having too much pricing power over essential services. Thus they do accomplish something in such a case.
- baggy_trough 3y ago
  If I set the maximum wage to one million dollars an hour, it would in some sense be a price control, but it would have no effect. I agree that ineffective price controls that are set above the market price do not cause shortages. Price controls that have an effect, which are those beneath the market price, cause shortages.
  - skhunted 3y ago
    Electricity is an essential good in the present era. There is generally no competition on the provider. As such the the energy company has a large amount of pricing power. Price controls, when done properly in such a situation, give the energy company enough profit to make it a worthwhile endeavor to be a provider for enough people whilst also preventing what is popularly referred to as price gouging. Price controls can be a good thing and when done properly allow for providers to make a sufficient amount of profit to be worthwhile for enough people whilst preventing gouging. Preventing "gouging" is the effect of capping the amount the of profit. Regulating the price that utility companies can charge has not resulted in shortages. For the most part, regulating how much insurance companies can charge has not resulted in shortages. Price controls, in and of themself do not cause shortages.