122PART TWOSUPPLY AND DEMAND I: HOW MARKETS WORKprice ceiling, producers were willing to sell QS, and consumers were willing tobuy QD. Thus, the shift in supply caused a severe shortage at the regulatedprice.Eventually, the laws regulating the price of gasoline were repealed. Law-makers came to understand that they were partly responsible for the manyhours Americans lost waiting in line to buy gasoline. Today, when the price ofcrude oil changes, the price of gasoline can adjust to bring supply and demandinto equilibrium.CASE STUDYRENT CONTROL IN THE SHORTRUN AND LONG RUNOne common example of a price ceiling is rent control. In some cities, the localgovernment places a ceiling on rents that landlords may charge their tenants.The goal of this policy is to help the poor by making housing more affordable.Economists often criticize rent control, arguing that it is a highly inefficient wayto help the poor raise their standard of living. One economist called rent control“the best way to destroy a city, other than bombing.”
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