Can there be price controls without shortages?

[artzai]

A price control is a law or regulation that limits the maximum price that can be charged for a good or service. Historically its use in free enterprise economies has mostly been limited to times of war, but has also been imposed in times of peace as a misguided way of controlling the economy. 363 federal court decisions discuss "price controls" and the "Fifth Amendment," which includes the protection of the Takings Clause against a deprivation of contract without just compensation, but only 61 federal court decisions discuss "price controls" and a right to privately contract. [1]

A shortage is the excess in quantity demanded above the quantity supplied. This occurs when the seller used a price that was below the market equilibrium price. When the seller increases its price, fewer consumers will buy the good and the shortage will disappear. In the example of the imaginary goods of "widgets", when demand for a widget at a given price exceeds supply, there is a shortage. A shortage tends to drive the price of the widget up. If there is a "price control" or government law prohibiting the seller from raising the price, then the shortage will persist.

"Reference(s)"

[1] E.g., the terms (("contract clause") or "right to contract" or "privately contract" or (obligations w/3 clause))

[gideon]

The only way a price control could NOT produce a shortage is if the price were set above the market price.

[advent]

yep, you set price above the market, and get surpluses (wasted resources) instead of shortage.

[langford59]

You may have a blind spot in your reasoning - you are thinking competitive marketplaces, but not all of our markets are competitive. The straight answer to your question is Yes, for monopoly products like electricity, cable TV, city water, railroad travel, postal delivery, and rural telephone service, price controls are in place, and there are no widespread shortages. However, those prices are usually set above what the market would bear in a competitive environment, as SDD has pointed out. The reason these services are not competitive is that the barriers to entry are very high, and frequently involve legal protections.