Welcome to the Q&A for ECN/APEC 2010, where you can ask questions and receive answers from your fellow students, the TA, and your professor.

Please only ask questions about the material for the course.

For questions and discussions about course organization or other course related topics, come see us after class or during office hours.

Feel free to discuss quiz questions on the Q&A, but do not provide direct answers to quiz questions before the quiz's due date.

You have been assigned an automatic user name which you won't be able to change.

Welcome to the Q&A for ECN/APEC 2010, where you can ask questions and receive answers from your fellow students, the TA, and your professor.

Please only ask questions about the material for the course. Try to create discussions about the material we see in class, instead of just thinking of economics in general (this is an introduction to microeconomics class, not a policy or government class).

For questions and discussions about course organization or other course related topics, come see us after class or during office hours.

Feel free to discuss quiz questions on the Q&A, but do not provide direct answers to quiz questions before the quiz's due date.

Are there any other benefits of placing a price ceiling below equilibrium besides fighting inflation?

+1 vote
17 views
We have learned about the many bad things price ceilings can do, but are there any good things? Why does the government place them besides to prevent inflation?
asked Mar 21 by canvas-111f4c97e5534 (185 points)
You could attempt to place a price ceiling on goods in order to make things more affordable but it doesn't work. That results in inflation.

2 Answers

0 votes
 
Best answer
In the early 2000s, Hugo Chavez placed price ceilings on various good in order to try and make those good affordable for the poor.  Inflation was starting to climb but could have stabilized without the ceilings.  Instead, inflation rose faster and Chavez took control of more sectors and set ceilings on more categories. This lead to major shortages that are still being felt today.  

So far there has not been a "successful" ceiling as they always lead to shortages which cause dead weight loss and loss of productivity.
answered Mar 22 by canvas-0a475dcfea4ca (1,400 points)
selected May 3 by canvas-111f4c97e5534
+2 votes

You could attempt to place a price ceiling on goods in order to make things more affordable but it doesn't work. That results in inflation.

answered May 1 by canvas-55bc761efa649 (181 points)
...