Bohanon & Curott: Here’s why price ceilings are self-defeating

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One thought on “Bohanon & Curott: Here’s why price ceilings are self-defeating

  1. Yes, as a general rule price controls are counter-productive. But the proposal you cite is a “strategic” use of price controls. When industries are highly concentrated, which is increasingly the case in the US, producers can profit by restraining supply (e.g., strategically closing oil refineries) and raising prices. In these cases a temporary price limit might change the profit equation, making higher volume (at lower prices) more attractive, thus increasing general welfare.

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