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Food and shelter are classic examples of necessary goods which the government provides through taxation to those who can't afford them.
by superuser2 13y ago
Food and shelter are classic examples of necessary goods which the government provides through taxation to those who can't afford them.
- PKop 13y agoGovernment subsidization would only put more upward pressure on prices though. And yet, food does not cost infinity dollars. I wonder why?
- mikeash 13y agoInelastic demand doesn't imply infinite price as long as there's competition among suppliers. Government subsidies on the demand side would put upward pressure on prices, but government subsidies on the supply side put downward pressure on prices, and there's a lot of supply-side subsidies.
- mistercow 13y agoI tend to agree, but to be fair, some of this would be mitigated if the market were truly free. For example, the lack of competition issue would be largely resolved in the absence of patents that grant long monopolies to single companies.
- Houshalter 13y agoThe government doesn't produce them or set the price, they merely buy them. It's still a free market.