A price control policy has several potential effects upon market welfare. These include deadweight loss, surplus transfer from producer to consumer, misallocative cost, and quality degradation. The present article provides accessible pedagogical models with which to incorporate the former two issues into a welfare analysis of price control. The analysis allows students to form a more complete understanding of price control policies.
- Price controls
- Product quality
ASJC Scopus subject areas
- Business and International Management
- Industrial relations