An Instructional Exercise in Price Controls: Product Quality, Misallocation, and Public Policy

34 Pages Posted: 17 Jun 2010

See all articles by Shane Sanders

Shane Sanders

Nicholls State University - Department of Finance and Economics

Dennis Weisman

Kansas State University - Department of Economics

Date Written: June 1, 2010

Abstract

Price controls are a contentious topic in society and hence a good source for economics classroom engagement. The standard textbook analysis of price controls is lacking, however. This paper presents real-world examples and classroom exercises on the topic of price controls. The exercises complement the standard textbook analysis of price controls by including costs related to misallocation and quality degradation. The discussion questions and analytical exercises provide students with a broad view of price controls and their policy implications.

Keywords: price ceilings, quality, misallocation, consumer surplus, public policy

JEL Classification: A20, A22

Suggested Citation

Sanders, Shane and Weisman, Dennis, An Instructional Exercise in Price Controls: Product Quality, Misallocation, and Public Policy (June 1, 2010). Available at SSRN: https://ssrn.com/abstract=1625985 or http://dx.doi.org/10.2139/ssrn.1625985

Shane Sanders (Contact Author)

Nicholls State University - Department of Finance and Economics ( email )

PO Box 2015
Thibodaux, LA 70310
United States
985-448-4242 (Phone)
985-448-4922 (Fax)

Dennis Weisman

Kansas State University - Department of Economics ( email )

Manhattan, KS 66502-4001
United States

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