What are the problems of price control?

[Nightmare]

The control o prices by indivifuaks can bring them a number of problems which limits it's effectiveness.
1. The price which is fixed in the commodity will normally be at variance with the equilibrium price. The control price could be above or below it.tgia disrupts the normal interplay of the forces of demand abd suoolu of quantities and goods. There will be excess of demand over supply if the control price I'd higher than the equilibrium price. On the other hand, if the control price is higher than the equilibrium orice, there will be excess of supply over demand.
2. A black market will develop: since the price fixed on commondity is relatively lower than the equilibrium price, producers anf sellers will resort to selling thier commodities on the black market.
They are sold behind closed doors. Only those who are willing to pqy a higher price would buy yh commodity at secret places or at odd hours.

3.Hoarding of commodities will also occur. Producers or sellers will not bring out all their goods and and commodities for sale.
They Will store away a large proportion of their goods, especially if they are durable. They do this in order to create an artificial scarcity.

 

[Learners Quest]

The problems of price control include :

1) It may lead to something called rationing (there won't be enough of the desired good for everyone):

2) The demand for the good may exceed supply and lead to black markets as people try to buy it from other people.

3) Price controls may result in shortages because suppliers have a hard time producing the good at such low prices. Suppliers might not want to produce anymore because they can’t charge more than what is mandated by price controls.

4) Price controls don't always work right away and there might be a period before shortages, which can last for awhile.