Well, I think I should come from a Nigerian point of angle, prices in Nigeria are not one to be compared to other places. If you walk through any market here in Nigeria or if you are a Nigerian, you will understand this things much more better. Every seller here is trying to make profit, make sales while still retaining and adding more customers.
And the topic, talking about price caps sounds like a good one. We can say it helps protects consumers from being/getting exploited. Most times, when we see the government steps in and try to regulate the prices of goods, it's mostly in response to the cries and outburst of the common citizens who can't keep up with the constant inflation in the economy. Let's take the price of petrol for example. When the price of petrol increases an it is left unchecked/unattended to, what happens? Prices of other things begin to increase, from transportation to foodstuffs and all. So, of a truth, regulating prices can really help bring about some stability and relief.
But in the real world here, things are a bit different, here you just have to face the reality and forget about the prices on papers. Here, prices tend to change on a daily. A trader who buys a bag of rice at ₦80,000 on Monday can go to the market on Thursday and find it at ₦100,000, now tell me, how do we fix a price cap in such a situation, especially in a country like ours where the prices flunctuate, dance and go up and down each and every time.
Let's take my mum for example, she sells provisions in front of the house and every single day she faces the dilemma of pricing. Anytime a customer comes and find out that the price of rice, milk or charcoal has increased, they complain, saying that was not the price the last time they came, but now, when she decides to reduce the price and sells, what happens? She end up experiencing loss because her suppliers sold it for her at a high price. If she keeps on selling or if she sells just so as to please people, I hope you know it won't be long before her shop runs down.
I won't deny the fact that their are some business owners also who love to take advantage of whatever, they will just increase the price of something for no reason at all, sometimes they increase it because they heard something will happen, something that hasn't happen. You will just discover that a bag of rice that you priced at ₦60,000 a day before has jumped to ₦95,000 overnight. Even when the stock was bought at an old price. I think that's one of the reasons why here we prefer to buy from people we know rather than from those we don't or randomly at the market.
So, about the question on if prices should be regulated, first off I would like to say or assume that we all know that a free market thrives on competition, and competition most times helps beats prices down, also overall prices can not be regulated, maybe just partially. Some basic commodities like rent, food and the likes should be given some level.of oversight. While giving room for flexibility for some other goods and services
Government shouldn't set too much boundaries, also traders shouldn't be left unchecked, as they would keep on exploiting consumers if they are. Let's just say the solution is that both buyer and seller should be at peace and feel protected in whatever transactions, and we strive to make sure that honesty becomes/remain the real measure of value.