The government sets the price at a below-market rate, so there is more demand than the manufacturer can provide. This creates shortages.
It is just the opposite, as Noah pointed out below, when the government sets prices above-market -- as they do with minimum wage. This creates more of the commodity than people will buy, and therefore surplus workers (i.e., unemployment.)
Just to be a bit more precise, setting maximum prices below the market clearing price leads to shortages (e.g., that article on flour in Zimbabwe), and setting minimum prices above the market clearing price leads to surpluses (e.g., minimum wage-caused unemployment). However, your point is well taken, and no, they never seem to learn.
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It is just the opposite, as Noah pointed out below, when the government sets prices above-market -- as they do with minimum wage. This creates more of the commodity than people will buy, and therefore surplus workers (i.e., unemployment.)
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