Cents Quote by Milton Friedman
“We economists don't know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can't sell tomatoes for more than two cents per pound. Instantly you'll have a tomato shortage. It's the same with oil or gas.”
About This Quote
Source Speech: Interview on Economic Policy, 1970s
Economists can manipulate markets to create shortages by imposing price caps, leading to reduced supply.
In simple terms: Price caps cause shortages.
Key Takeaway
Avoid price controls to prevent shortages.
Themes
economics
policy
market
Mood
cautious
analytical
Type
economic
policy
When to use this quote
- retail pricing
- energy markets
- agricultural policy
- consumer goods
Key Concepts
market failure
price controls
Questions to Reflect On
- How do price caps affect producers?
- What alternatives exist to manage prices?
A Different Perspective
Shortages may also arise from supply chain issues, not just price caps.
