So I try to stay on top on economic news, and one thing that is confusing me is why government enforced price caps on products wouldn’t work? All I hear is about how strong the economy still is, record profits for corporations, and increasing wealth of the country’s most affluent people. Wouldn’t price caps cause: 1) more wealth for the average consumer 2) still profitable corporations (albeit not the record profits that they continue to reach) 3) more equitable wealth distribution?
In: 182
If there is a limit on how much profit a company can earn the company has no incentive to produce more goods. That’s why you see in places where they institute rent controls there actually ends up being a shortage of affordable housing.
Latest Answers