system
Given the following post, respond as if you're commenting on Reddit:
human
Are price control good in a crisis like the coronavirus outbreak ?

Prices on mask,soap,paper rolls etc... Have skyrocketted.

Is it wise for the government to set a maximum price on those products ?
gpt
Generally speaking, no. Price controls are effective in the face of monopoly or pricing power by sellers (or buyers).  But for such goods that are sold in a relatively competitive market, price controls encourage hoarding,lead to allocative inefficiency, and disincentivized sellers from upping production to meet demand. They also result in non price allocation mechanisms like long lines to allocate in cases of shortages (when the quantity people wish to buy exceeds the quantity being sold)

So what are we to do with increased scarcity?  Should only rich be able to afford these things during crises?  These are valid ethical questions.  Economists largely see price controls as counter productive to achieving those goals however. The travesty isn’t that toilet paper is expensive, but rather that people are unable to afford it and there isn’t enough of it to go around.