Comments by "looseycanon" (@looseycanon) on "What if Price Increases Were Prohibited? Success and Failure Test Cases" video.
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That's actually not true. You can also add consequence in terms of fines or add policies, which would motivate other producers in to the market. Now you may be thinking, that noone would enter, because price cap doesn't allow them to make profit, but you would be wrong. Nonfinancial hurdles to enter and operate in the market also exist, which you can remove. Things like environmental protections or patents can be rolled back to allow for more productive use of assets and thus for other players to make profit even under conditions of price caps, because you've just lowered entry and operating expenses of that particular market. Another case, where price caps would actually help, is field, where demand is highly inflexible. Take housing, for instance. You might think, that nobody would build new housing, if price caps were introduced, however, thanks to that same price cap, families now have more disposable income. Some of this translates into inflation in other fields (energy, foodstuff, construction materials), but the effect is net positive, allowing the families to finally put aside for down payment on mortgage and actually build new houses them selves. Meaning the caused effect is the kind of housing, that is built.
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@kieranrollinson8750 Not, if they end up facing a fine, which would make their electricity even more expensive to not produce. At this point, they begin to limit damages and increase or maintain production... Or if they could lower their AVERAGE price relatively quickly, by, for instance retooling one of their closed down powerplants, at which point, they make profit. All that needs to be done, is to allow that powerplant to work economically, for instance, by scrapping emmission allowances/carbon tax.
Electricity, however, is a bad commodity show this on, due to the inner workings of the grid. Long story short, not all electricity can be bought equally, but at all times, there has to be certain amount of electricity in the grid to prevent blackouts. So electricity is bought in tiers first goes base load, then wind and solar, then more easily regulable sources like natural gas or petrol. Facemasks would have been better choice
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