Question

What is something that is bad in the economy and if you had the power , how would you fix it? the course is principles of microeconomics thank you

Answer 1

Price ceiling and Price floors are bad for the economy and if I have the power I would fix it.

For example. A price ceiling is a situation when the government set the price of a good below the equilibrium level and no firm in the market can sell their product at a higher price than this set by the government. This situation may seem like a very novel to the eye but it leads to a greater deadweight loss and harm the consumer and the producer.

At a lower cost, the aggregate demand of the good increase but at a lower price the supply of the good decrease. It leads to a shortage in the economy. This shortage creates a deadweight loss in the economy and leads to black marketing and harm to the consumer surplus.