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Price Controls I do not support gas price controls, or more specifically, price ceilings on gasoline because they do not help the economy in the long run. The laws of supply and demand dictate that the market itself should be the determining factor of prices, which change with the supply and demand of specific goods in the market. A couple factors such as the negative effects on the Law of Supply, and the hidden costs to customers make price ceilings an unpopular choice for most economies. Within the Law of Supply, certain determinants are affected when price controls are imposed. Although it may not be apparent in the short-run, price ceilings will limit the number of producers entering the market due to the increased difficulty of making a profit because of the prices imposed on their goods. In addition to limiting the number of producers, price ceilings reduce the need to be competitive, which leaves companies little incentive to increase efficiency and innovative initiatives in the way they produce and procure their products to lower the prices themselves. Price Ceiling on Oil In the past, such as the price ceiling on oil during the 1970’s in the United States, price controls created disequilibrium between supply and demand which resulted in a shortage of gasoline during that time. This meant that those that were willing and able to purchase

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