Theclassicaltheory explainsthatifaneconomy experiencesashockliketheoutbreakoftheCOVID19 pandemic, the market systems may fail to allocate resources efficiently, causing a disequilibriuma situation known as market failure. Governments may intervene to correct such market failures by the impositionofpricecontrols.

Usinganexampleofagood/service,discusshow(supportyourdiscussion with relevant diagrams):

1. Amaximumpricecontrolworksandwillimpacttheeconomy.