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Price Ceilings: The US Economy Flounders in the 1970s

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Description: In 1971, President Nixon, in an effort to control inflation, declared price increases illegal. Because prices couldn’t increase, they began hitting a ceiling. With a price ceiling, buyers are unable to signal their increased demand by bidding prices up, and suppliers have no incentive to increase quantity supplied because they can’t raise the price. What results when the quantity demanded exceeds the quantity supplied? A shortage! In the 1970s, for example, buyers began to signal their demand for gasoline by waiting in long lines, if they even had access to gasoline at all. As you’ll recall from the previous section on the price system, prices help coordinate global economic activity. And with price controls in place, the economy became far less coordinated. Join us as we look at real-world examples of price controls and the grave effects these regulations have on trade and industry. Microeconomics Course: http://bit.ly/20VablY Ask a question about the video: http://bit.ly/1TGkT0D Next video: http://bit.ly/1XN6TRK Help us caption & translate this video! http://amara.org/v/GLNR/
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Category: Auto Create - CC_LARCH_ECON101
YouTube URL: https://youtu.be/sq1zIj8s8R0
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