ajarrett Wrote:
Nov 13, 2012 12:43 PM
You are absolutely right that price ceilings (and price floors such as minimum wage) create inefficiency and a misallocation of resources. In answer to your question, it would be better for the family with an almost empty tank of gas if the price of gas was $5 a gallon. The price hike would deter others, who don't really need the gas, from taking more. Thus, there would be enough gas for the family who needs it. Even though they have to pay more, they would be willing to do so.