/biz/ - Business & Finance

>>51436341
>Room temperature IQ: The Post

In the 1970's OPEC raised gas prices from $3 to like $10 so as a result Nixon put in price caps at like $4. This led to gigantic gas lines and shortages.

Not only does price fixing create inevitable shortages due to the lowering the prices increasing the demand (imagine if houses were capped at $100,000, would you be more likely to try and buy a house? Of course you would), it also lowers the supply because as the lower more businesses will drop out and not sell anything at all, and instead decide to use their money to invest in literally anything else.

What is even worse is that instead of actually working, people would sit in these lines for hours and hours and produce nothing. When you take into account the average income of these people and multiply it by the time spent sitting in line, even with a price cap of $4, they would end up spending way more than the $10 for the gas due to the opportunity cost.

In the 1970's OPEC raised gas prices from $3 to like $10 so as a result Nixon put in price caps at like $4. This led to gigantic gas lines and shortages.

Not only does price fixing create inevitable shortages due to the lowering the prices increasing the demand (imagine if houses were capped at $100,000, would you be more likely to try and buy a house? Of course you would), it also lowers the supply because as the lower more businesses will drop out and not sell anything at all, and instead decide to use their money to invest in literally anything else.

What is even worse is that instead of actually working, people would sit in these lines for hours and hours and produce nothing. When you take into account the average income of these people and multiply it by the time spent sitting in line, even with a price cap of $4, they would end up spending way more than the $10 for the gas due to the opportunity cost.

Financially speaking, what makes the average 'nob so disconnected from the affairs of the commoners, or is it truly malevolent agitation at this point?

Financially speaking, what makes the average 'nob so disconnected from the affairs of the commoners, or is it truly malevolent agitation at this point?