Changes

Think back on what you have learned earlier in the course.  There is one major cause of shortages, and it is not the invisible hand.  It is government price controls.  In 1973, the government imposed certain price controls on gas, and that caused the shortages and inefficiently long lines at gas stations.

Think back on what you have learned earlier in the course.  There is one major cause of shortages, and it is not the invisible hand.  It is government price controls.  In 1973, the government imposed certain price controls on gas, and that caused the shortages and inefficiently long lines at gas stations.

Milton Friedman would say that eventually the invisible hand does prevail.  OPEC does not still have so much power over oil prices today, and it faces competition from Russia, Mexico, the United States and other non-OPEC nations.

Milton Friedman would say that eventually the invisible hand does prevail.  OPEC does not still have so much power over oil prices today, and it faces competition from Russia, Mexico, the United States, Canada, and other non-OPEC nations.

 

==Monopolistic Competition==

==Monopolistic Competition==