Alternative solution to price ceiling to reduce shortage of corn.#
Please give me some ideas...
2006-09-11 04:55:45 · 6 answers · asked by Smart Louise 1 in Social Science ➔ Economics
I want to know what alternatives can be used like using subsidy or imports.
2006-09-11 20:52:09 · update #1
There is no shortage, and government subsidizes corn production.
The current thought is to use the corn for ethanol, further worsening our water shortage and chemical effluent in the environment. Other crops are better sources of ethanol.
Also, drop reduce protective trade barriers.
2006-09-19 04:59:04 · answer #1 · answered by Anonymous · 3⤊ 0⤋
A price ceiling would WORSEN the shortage, not alleviate it. If you limit the amount people can charge for something to below market price, there is no profit in bringing it to market, which diminishes supply. Cases in point: Nixon's wage and price controls, or New York's rent controls.
If the government truly wants to alleviate shortages of things, they should stop meddling with the market and let the invisible hand work.
edit: In response to your additional information - my answer is the same. If the government wants a "solution" to shortages, the answer is to DO NOTHING and let the market work it out. Subsidies don't solve the problem, they just mask it with tax money. They're not the answer unless you are willing to subsidize that product forever; when the subsidies run out, the original market conditions return. As far as imports, the government doesn't need to arrange that; all it has to do is step out of the way and allow private entities to conduct their own import/export activity. (This means getting rid of any tariffs or duties that stand in the way, but again, that is something government accomplishes by NOT interfering with the market.)
2006-09-11 12:04:09 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Well, based on one of the other answers the better question would be what is the government doing to cause the shortage of corn.
If the governments stays out of it the price of corn will rise and farmers will commit more acerage to production of corn the the supply of corn will increase.
Anytime there is shortage or over supply you don't have to look very far to find government meddling at the root of the problem.
2006-09-11 22:22:01 · answer #3 · answered by Roadkill 6 · 1⤊ 0⤋
There's a shortage of corn? really? Plenty of it in my grocery store.
Perhaps it has something to do with subsidising of using corn to make ethanol based fuel? So- we taxpayers are actually paying money to ensure the shortage of corn.
2006-09-11 12:04:37 · answer #4 · answered by Morey000 7 · 1⤊ 0⤋
Price ceilings make shortages worse, not better.
2006-09-12 00:24:55 · answer #5 · answered by intelbarn 3 · 0⤊ 0⤋
stop paying farmers not to grow corm.
2006-09-14 20:48:04 · answer #6 · answered by Steve R 6 · 1⤊ 0⤋