How Price Ceilings Create Shortages and Lower Quality
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How Price Ceilings Create Shortages and Lower Quality
Price ceilings result in five major unintended consequences, and in this video we cover two of them. Using the supply and demand curve, we show how price ceilings lead to a shortage of goods and to low quality goods. Prices are signals that indicate to suppliers how much is being demanded, but when prices are kept artificially low with price ...
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