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Thursday, September 08, 2005

Iraqi Gasoline Price Controls

I recently posted a short piece on price controls. Now I have a current real-world example of what happens when you artificially cap prices. This article from Reuters talks about price controls on gas in Iraq. It demonstrates many of the classic problems associated with this "solution" to supply shortages - black markets, increased demand, etc...

Remember - you can't repeal the laws of supply and demand with the stroke of a pen.

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