Dangers Of Maximum Price
- Emergence of black market- It is likely to give rise to black market where goods are sold illegally at prices above the one set by the government
- Hoarding of goods: Sellers may create artificial shortages by, holding back the supply of the price controlled commodity so as to force buyers to pay higher prices for the commodity.
- Escalation of bribery and corruption: It leads to unfair and illegal practices of bribery,' corruption and favouritism as sellers become selective in the dealings.
- Inconvenience to consumers. It brings about inconveniences to consumers in the form of long queues for the commodity because the consumers must line up in order to buy the items.
- Costly undertakings: It is very expensive to maintain and administer maximum price because the government may have to enforce and punish those who sell above the maximum price