ISSUE 5

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If a competitive market gives rise to equilibrium prices at which the quantity of a good supplied equals the quantity demanded, does it make sense to have government impose artificially high prices or artificially low prices on particular goods or services? While they may not approach "perfect competition", markets for such things as housing, food, transportation, and reading material seem quite competitive: many suppliers, lots of consumer choice and so on.

Enough people support the idea of imposing rent controls (maximum prices set below the equilibrium level) on housing to make this a common practice in many places. If you would like to read something about rent control here is an article which is strongly opposed to the practice. And here is one that suggests it may be necessary in some situations (Silicon Valley in this case!). And another that presents a moderate take on the issue.

Does a policy of imposing maximum prices on housing appeal to you? If so, would you extend the same reasoning to support maximum prices for food, transportation, and books?