Youtor
Price Ceilings The US Economy Flounders in the 1970s
>> YOUR LINK HERE: ___ http://youtube.com/watch?v=sq1zIj8s8R0
In 1971, President Nixon, in an effort to control inflation, declared price increases illegal. Because prices couldn’t increase, they began hitting a ceiling. With a price ceiling, buyers are unable to signal their increased demand by bidding prices up, and suppliers have no incentive to increase quantity supplied because they can’t raise the price. • What results when the quantity demanded exceeds the quantity supplied? A shortage! In the 1970s, for example, buyers began to signal their demand for gasoline by waiting in long lines, if they even had access to gasoline at all. As you’ll recall from the previous section on the price system, prices help coordinate global economic activity. And with price controls in place, the economy became far less coordinated. Join us as we look at real-world examples of price controls and the grave effects these regulations have on trade and industry. • Try our price ceilings interactive practice: https://mru.io/7cz • Microeconomics Course: https://mru.io/g7s • Next video: https://mru.io/isg • Help us caption translate this video! http://amara.org/v/GLNR/ • 00:00 August 1971: Nixon declares all price increases illegal • 01:01 Gas price ceilings – paying with time instead of money • 01:49 Price system fails – unintended consequences nationwide • 03:01 Unintended consequences for chickens
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