Supply and Demand in a Regulated Market Imagine that politicians have decided th

Question

Supply and Demand in a Regulated Market Imagine that politicians have decided that fuel prices are excessive for U.S. drivers and have passed a law that grants the power to regulate retail fuel prices to the U.S. Department of Energy. Post by Day 3 a 250- to 300-word statement that addresses the following: •How might supply and demand for fuel be affected by fuel prices that are set by the Department of Energy instead of by a free market? •Will the amounts of fuel demanded by consumers be met by the quantities supplied by a regulated market? •Does a regulated market result in better economic efficiency in the production and consumption than a free market?

Explanation / Answer

The supply and demand for fuel be affected by fuel prices that are set by the Department of Energy instead of by the free market. The retail price of fuel would help the transporters to conduct trade and business in an efficient manner as it is going to reduce the expenditures and increase in the revenues would take place.

The amount of fuel demanded by consumers would be met by the quantities supplied by a regulated market. It is going to increase the demand of fuel in the market. The supply tends to be increase giving rise to sales in the market.

A regulated market result in better economic efficiency in the production and consumption than a free market. It happens because the affordibility of the fuel by the consumers. It also happens because the consumption increases which increases the revenues of the firms.

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