Question

Give an example of a price controls and its impact on the economy, and explain who are the ones that gain and who are the ones that suffer losses from these price controls. When might it be beneficial to have price controls

Answer 1

One of the best examples for price control is in the field of medical treatments for diseases when alternatives for drugs are limited. With the price control it binds the producers not to charge more than the price and help patients from being exploited. Here though producers might suffer but it would help patients to afford treatments at lesser cost. Price controls are effective when the market structure is monopoly and people have lesser options for replacements.