Question

Explain why shortages and surplus are not temporary when price controls are used?

Answer 1

Once you have asked such a question, you are familiar with the demand curve and the supply curve. These curves usually intersect at some point. The point of intersection of these curves is called the equilibrium price, i.e. the price that suits the buyer and the seller. Entrepreneurs offer a larger number of goods if the price is high, but then the number of sales will shrink, people will not buy expensive goods. The triangle located above the equilibrium price point is formed on the chart-it is a surplus of goods on the market. A triangle, which is formed from the point of equilibrium price below, means the deficit of goods. Understandably, at a low price people are able to buy everything from the shelves of the store. I HOPE IT HELPS YOU!