Changes

1.  Fill in the blanks in the following sentence: The [[supply and demand]] for a good determine both the _________ and ___________ at which the good is sold.

1.  Fill in the blanks in the following sentence: The [[supply and demand]] for a good determine both the _________ and ___________ at which the good is sold.

:Price controls (fixed prices) cause the supply to decrease because the sellers cannot make as much as in the free market.  If the price controls are much lower than the free market price, then many sellers may go out of business.  In the case of medical prices, the price controls discourage people from practicing medicine or providing medical services.  So there is not enough, and demand is greater than supply.  The lower price, due to the Law of Demand, causes the demand to increase, which makes the shortage even worse.  As a result of the shortage, waiting lists exist.

:Price controls (fixed prices) cause the supply to decrease because the sellers cannot make as much as in the free market.  If the price controls are much lower than the free market price, then many sellers may go out of business.  In the case of medical prices, the price controls discourage people from practicing medicine or providing medical services.  So there is not enough, and demand is greater than supply.  The lower price, due to the Law of Demand, causes the demand to increase, which makes the shortage even worse.  As a result of the shortage, waiting lists exist.