By restricting where the good is available to use, or restricting the advertising for the good, demand for the product will shift left and fewer people will use the good.
-Economic growth will increase demand
-Recessions will decrease demand
-The demand for their finished product may increase (e.g. Lithium)
Pmax is lower than equilibrium price.
This means there is Excess Demand at Pmax, causing a shortage.
Qs products are produced. Qd-Qs consumers do not get the product.
It is not possible to prevent people who have not paid for the good to benefit from it.
-Users will use the common good because it gives them individual benefit.
-By using the common good, the common good is depleted (costs are paid by all).
-Eventually the common good is fully depleted and not usable by anybody.
One person consuming the good does not stop another person consuming it.
When industry regulators are overly-influenced by the industry they are meant to regulate.
e.g. Boeing is too powerful with the FAA, which led to the 737 Max flying even though it was unsafe
Goods which are under-consumed because consumers underestimate the benefits of the goods to themselves and society.
The government sets two prices: Pmax and Pmin
If the market price goes above/below these prices, the government intervenes by selling from/adding to the buffer stock.
