Introduction.
National, local and regional authorities sometimes implement and reinforce price control policies which are legal giving maximum and minimum prices of goods and services in an economy. By doing this, the government and concerned body intervene in the market directly thereby protecting consumers from being exploited. Two common methods that include price ceiling and price floor are in play. Considering the current situation of the government, there is need of immediate intervention as most entrepreneurs are aggressive and therefore maximise profits when given an opportunity (Denny 03).
Question 1:
The government should implement price control in this case because of the following main reason. That is, to protect the consumers from exploitation.
Question 2:
In the midst of a disaster, there is scarcity. Due to this fact, the nation is likely to face pressure in sourcing for goods to meet the demand of its citizens. If one is allowed to make a fortune, it means that only a few will be able to access the commodities especially the rich leaving the poor complaining because the prices are too high.
Question 3:
Whenever there is an exchange outside the price control system, consumers are likely to lose as entrepreneurs benefit. The prices of goods are likely to heighten, double or triple depending on demand.
Question 4:
For the survival and public image of the business, I wouldn’t take the risk. While in crisis, there are many gaps that exist in the market and therefore as an entrepreneur, it is important to be creative and innovative. This assists in maximising profits rather than exploiting the consumer’s money.
Question 5:
Price control, in this case, does not necessarily lead to efficiency in the use of essential resources. Business people are concerned with profit maximisation and therefore will not control the number of products they sell but may obey the price policy (Ball and David 9). The area affected should focus upon attaining the Infrastructural development goal. With properly developed infrastructure the advantages will include the efficient water supply as pipes will be fitted, dams constructed, tanks and other reservoirs put in place. Besides, there will be an improved accessibility, which ensures proper food and gasoline supply from any part of the nation.
Conclusion.
In reality, price control is more likely to distort the operation of the market rather than solve problems. In certain circumstances though especially when the possibility of exploitation is too high, there is need for government intervention to ensure that the citizens are protected and quality standards maintained.
Works Cited
Ball, Madeline K, and David Seidman. Supply and Demand. New York: Rosen Pub, 2012. Print.
Denny, J A. The Role of Government in Economy and Business. Yogyakarta: LKiS, 2006. Print.
