The Dangers of Price Controls

The government trying to make things cheaper can actually make them impossible to find.

It’s called a price ceiling, like rent control. The government caps rent at $800 for

an apartment that should be $1,000. Sounds great for renters, but now fewer landlords

want to supply apartments, and way more people want to rent at the cheap price. This creates a massive

shortage. You get wasted time, inefficient allocation, and even black markets. The same thing happens

when prices are set too high, like with some price floors, creating wasteful

surpluses. These interventions, meant to help, often just create a lose-lose situation

for the market.