Abstract
Utilizing a general equilibrium framework, this paper studies the economic effects of price regulation in competitive market structures. The analysis considers both the short-run and long-run implications of price regulation upon factor rewards and allocaticns and upon the production of quality. It also characterizes the adjustment path to a competitive long-run equilibrium. The positive relation between regulated price and the production of quality is described, and the identification of who gains and who loses and how resource allocations are affected is shown to depend upon factor intensity rankings.
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