Supply and Demand Essay

Submitted By lawbyevy58
Words: 545
Pages: 3

A family’s home is damaged in a storm, and the family drives to a hotel for shelter. When they arrive, they learn the rates for rooms at the establishment have doubled. The owner of a generator learns thousands are without power. He could take time away from his family, drive to the affected area, and supply power, but he would not be willing to do it for his normal rates. He learns “price gouging” is illegal, and he decides to stay home. Government can intercede into both situations and solve the problem for people who really have no choices. Government does intercede. Do the results help society meet stated goals? Do the lower room rates and higher wages mandated by government serve society? Walter E. Williams, Ph.D, says no. The family of four might rent two rooms at the hotel at normal rates. Confronted with the higher rate, the family decides to make do with one room instead of two. This leaves the second room available for another family which also needs shelter after their home has been made uninhabitable. Had the second man not been encumbered by price fixing, he would have taken the time away from his family and provided a much needed commodity to people in need. However, the governmental goal of preventing higher prices during times of disaster prevents people from obtaining electricity, something for which they would voluntarily pay the higher price. I think the government intervention has good motives, but the good intentions assume people will not adjust their behavior. The assumption is incorrect, resulting in unintended consequences. Dr. Walter E. Williams has, among other things, a doctorate degree in economics. The manner in which he explains economics make it easy to understand. Dr. Williams’ father played no part in his childhood, which he spent with his mother and sister in a Philadelphia housing project. He attended college one semester before being drafted into the army, he waged a battle against Jim Crow law and was nearly court-martialed for challenging the racial order. Williams reentered…