Changes

11.  Imagine yourself as a powerful regulator who can set the price of a certain good in a certain industry wherever you want.  Suppose that in the free market, competitive equilibrium would have price “P”.  Where would you set the price if you diabolically wanted to cause a shortage of goods?  Where would you set it if you diabolically wanted to cause a surplus of goods?  Explain.

11.  Imagine yourself as a powerful regulator who can set the price of a certain good in a certain industry wherever you want.  Suppose that in the free market, competitive equilibrium would have price “P”.  Where would you set the price if you diabolically wanted to cause a shortage of goods?  Where would you set it if you diabolically wanted to cause a surplus of goods?  Explain.