Artificial price controls affect the supply and demand. The best example to demonstrate the effect of artificial price controls on supply and demand is rent controls result in shortages and minimum wage laws result in surpluses
EXPLANATION
The most frequently complained economic problems are the price and quantity of goods which are determined on demand and supply, especially basic necessities such as meat, eggs, sugar. Oftentimes, dissatisfaction with the price changes becomes a public pressure on politicians. Then politicians issue legislative policies preventing certain product prices from rising "too high" or falling "too low".
The policies imposed by the government to regulate prices are called price controls. As mentioned above, price controls are divided into two types. First set a price ceilings to keep prices from rising beyond the ceiling limit. The second is the price floors, the price floor is set to keep prices from falling below that floor. Economists will certainly predict the effects of this law made by the government, how people and companies will react to price controls.
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If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:
• In a market without price controls, supply will eventually
brainly.com/question/1420261
KEYWORD: supply, demand, wage law, artificial price controls
Subject: Economy
Class: 7 - 9
Subchapter: Price Controls
