After a long public discussion about goods and services that should be provided to the population, the government decides that a certain scarce good should be provided to anyone who wants it at no cost. As part of this effort, the government sets a price of zero for that good and passes a law making it illegal to transact the good at any price. However, people can give the good away. Assuming that this good is highly desirable for segments of the population, what do you think the effect of this law will most likely have on the market? What would happen if this particular law was removed after being implemented?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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After a long public discussion about goods and services that should be provided to the population, the government decides that a certain scarce good should be provided to anyone who wants it at no cost.

As part of this effort, the government sets a price of zero for that good and passes a law making it illegal to transact the good at any price. However, people can give the good away.

Assuming that this good is highly desirable for segments of the population, what do you think the effect of this law will most likely have on the market?

What would happen if this particular law was removed after being implemented?

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