PRICES WERE OUT OF CONTROL at the end of 3rd-century Rome, and the Emperor Diocletian was determined to rein them in. In AD 301 he issued his famous Edict on Prices, a complex piece of legislation that banned speculation and established price ceilings for a wide range of goods and services. But the ambitious law failed. Though violators could be punished with death, inflation and speculation persisted. Goods were hoarded, or sold on the black market. The economic crisis worsened. Eventually the law was abandoned. Like countless rulers before and since, Diocletian discovered the hard way that...
The problem with price controls is that they stifle an important signal to the market. Prices cause the market to adjust since free market prices are a measure, in a sense, of the demand. If the market demand is known, then the market can react. Many times it is the regulations that stifle the market supply and creates an imbalance
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