To see how price controls affect market outcomes, let’s look once again at the market for ice cream. As we saw in if ice cream is sold in a competitive market free of government regulation the price of ice cream adjusts to balance supply and demand. At the equilibrium price the quantity of ice cream that buyers want to buy exactly equals the quantity that sellers want to sell. To be concrete, suppose the equilibrium price is $3 per cone. Not everyone may be happy with the outcome of this free-market process. Let’s say the American Association of Ice-Cream Eaters complains that the $3 price is too high for everyone to enjoy a cone a day (thir recommended diet). Meanwhile the National Organization of Ice Cream Makers complains that the $3 price the result of cutthroat competition is too low and is depressing the incomes of its members. Each of these groups lobbies the government to pass laws that alter the market outcome by directly controlling the price of an ice-cream ...