Price Control Is A Government Imposed Policy That Changes The Natural Forces Of The Market

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A price control is a government imposed policy that changes the natural forces of the market. These price control policies are put in place to facilitate either the consumer, or the supplier side of the market in question. Price control measures are essential because they cater to all sides of the market, depending on the type of policy chosen, and the scenario at hand. Price ceiling is a type of price control measure that is commonly associated with rent control, in which a price cap is enforced on the rent; a policy that affects many citizens around the country. Rent control is put in place to provide affordable housing to citizens, however, this policy does not exist in all provinces. Through the examination of municipalities without…show more content…
The change will require some time to take effect on the majority of the population, rendering demand inelastic. The same goes for the supply side. Although landlords will be losing profit caused by the price cap, they won’t sell their properties right away, because many of them need to proceed with the contracts they have with the bank. In addition, the increase in demand for rental homes will cause an increase in supply, but the construction of new rental homes will not take place immediately, once again rendering supply inelastic. The opposite takes place for the long-run effects, in which the supply and demand for housing are elastic. After sufficient time passes, citizens have adjusted to their new lifestyles and have moved out, making demand elastic. And, since there is an increase in demand, the construction of rental properties will be completed in the long run, rendering supply elastic. This price control policy is put in place to provide affordable housing for citizens. Conversely, there are provinces who do not have any type of rent control, and those situations adopt a different market. In municipalities that allow landlords to increase rent by whatever amount they want, the tenants start to suffer from the no longer affordable housing, which is slowly ruining their lives. Alberta, Saskatchewan, Nova Scotia, New Brunswick and Newfoundland and Labrador, are
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