Question

During the last pandemic, many state governments in India enforced price legislation by capping prices on treatment of COVID-19 at private hospitals and later on the sale of masks and sanitisers.

Answer 1

During the COVID‑19 pandemic, several Indian state governments imposed price controls,first capping charges for COVID‑19 treatment at private hospitals and later fixing maximum retail prices for masks and sanitisers,to keep essential care and protective goods affordable for the public; however, economic theory and past experience warn that such price ceilings, while benefitting consumers in principle, can reduce supply, create shortages that require rationing or other allocation methods, and sometimes encourage black markets.