What a surprise. Do you suppose, if every American was required under penalty of law to buy one package of major brand hotdogs per month, that the price of those would double and triple too?
I bet it would if the government started giving out free hot dogs to millions of Americans at the same time.
If I and a handful of my neighbors opened up separate lemonade stands in our gated-community neighborhood, and charged, over the course of our first year of operation, what the market would bear, the likelihood is that lemonade would be quite affordable there. Now let's say that, after that first year of operation, the homeowners association passes a rule that requires each resident, under penalty of fine, to purchase one pitcher full of lemonade each week from a neighborhood stand of their choice. Will the price of lemonade from one of those stands go up or down? Would customer service improve? Would the quality of the product increase?
Think about human nature, and how the stand owners are going to naturally react to the new situation. For one thing, suddenly, cost-efficiency of operation is going to become much less a priority to them, right? Everybody
has to buy lemonade now.
