tag:blogger.com,1999:blog-17501440.post112977707036970635..comments2023-08-20T07:26:25.416-04:00Comments on Walker Economics Blog: Basic Economics - Hawaiian StyleMichael Arjonahttp://www.blogger.com/profile/06189327401592258439noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-17501440.post-1130100677733272312005-10-23T16:51:00.000-04:002005-10-23T16:51:00.000-04:00The first article shows that because there is a pr...The first article shows that because there is a price ceiling, the quantity demanded is more than the quantity supplied, so there are a lot more instances where the gas stations run out of gas because of shortages. This then causes people to run out of gas on the road in search for a gas station that HAS gas, which then increases the demand for tow truck services. This increase in demand for tow truck services then increases the price. Therefore, the money NOT spended on gas because of the price ceiling is then spended on the tow truck service. Therefore, the price ceiling should not be there because instead of helping consumers pay less, they are instead redirecting the money the consumers pay from gas stations to tow trucks. SO, the price ceiling is ineffective. <BR/>-Emily FreebairnAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-17501440.post-1130002013389188042005-10-22T13:26:00.000-04:002005-10-22T13:26:00.000-04:00The price ceiling causes consumers to make up the ...The price ceiling causes consumers to make up the gap between willingness to pay and the actual price they are paying. This can be payed in nonmonetary terms such as time, but the second article shows that the price ceiling can actually cause consumers to pay more. Since the cost of gas is higher, people will wait longer to get gas and, therefore, more people will run out of gas on the road. This increases demand for tow truck services (a shift right in the demand curve), which will increase the price of tow truck services. Other industries that are similarly related to gas may behave in the same way, so consumers may actually end up paying more in monetary and nonmonetary costs than without the price ceilingAnonymousnoreply@blogger.com