Despite the disadvantages of price ceilings and price floors....question below?
Despite the disadvantages of price ceilings and price floors why may governments still choose to implement these two forms of pricing strategies?
- JuanBLv 71 month ago
This question is really messed up. Basically Economics is saying assume everything is perfect, and you get equilibrium Utopian bliss. Well guess what, you never make it there, you always have market flaws. So who would government use price strategies? Because they feel the advantages they fix in the market flaws outweighs the disadvantages of their actions.
EG. They believe their Minimum wage decreases the number of workers who work below the poverty line than unemployed workers it creates
EG2 They believe renting price control will give more homes to the homeless, than it will limit homes.
- OiyLv 61 month ago
In the crisis period, such as war or external shock, the market cannot function perfectly. So people will take advantage of each other. The government has to play the referee part for justice, but only in a short time.