Why is customer service better at Starbucks than at the DMV?
Religion & Liberty Online

Why is customer service better at Starbucks than at the DMV?

Note: This is post #22 in a weekly video series on basic microeconomics.

Prices are signals that indicate to suppliers how much is being demanded. So what happens when the government puts a cap on the price that can be charged for a product or service? Two effects are shortages and lower quality. In this video by Marginal Revolution University, economist Alex Tabarrok explains why this happens.

 

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: When Nixon tried to control prices

Joe Carter

Joe Carter is a senior writer for The Gospel Coalition, author of The Life and Faith Field Guide for Parents, the editor of the NIV Lifehacks Bible, and coauthor of How to Argue Like Jesus: Learning Persuasion from History’s Greatest Communicator. He also serves as an associate pastor at McLean Bible Church in Arlington, Va.