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According to an article in the New York Times, the Venezuelan government "imposes strict price controls that are intended to make a range of foods and other goods more affordable for the poor. They are often the very products that are the hardest to find."
a. Why would imposing price controls on goods make them hard to find?
b. One of the goods subject to price controls was toothpaste. Draw a graph to illustrate this situation. On your graph, be sure to indicate the areas representing consumer surplus, producer surplus, and deadweight loss.
Source: William Neuman, "With Venezuelan Cupboards Bare, Some Blame Price Controls," New York Times, April 20, 2012.
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