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unaffected by the laws of supply and demand

2007-04-30 13:27:00 · 2 answers · asked by lena 1 in Social Science Economics

2 answers

Dr. J is right that it is government interference that causes some products to be shielded from the normal operation of the laws of supply and demand.

But he's dead wrong when he says that government intervention ALWAYS causes negative consequences. It's very easy to think of examples where government intervention is quite necessary...for example, national defense. I don't see that being provided for very effectively by operation of the natural laws of supply and demand.

2007-04-30 16:54:10 · answer #1 · answered by Bjorkmeister 5 · 0 0

Health care (e.g. pharmaceuticals) have been 'unaffected' by the law of supply and demand because the employer and/or the taxpayer (i.e. the government) pays for most of it - rather than the consumer. (Note: most of this disruption in the free market of health care has been caused by government interventions / regulations / tax issues.)

Milk is heavily price 'regulated' (i.e. price controls) by the government, so it is 'relatively' unaffected.

Bottom line: government interventions are the only known, long-term, disruptors of the LAW of supply and demand. These interventions ALWAYS have negative consequences.

2007-04-30 16:18:49 · answer #2 · answered by Doctor J 7 · 0 0

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