Question

Suppose you’re doing some history research on shoe production in ancient rome during the reign of the famous emperor diocletian. Your documents tell you how many shoes were produced each year in the roman empire, but they don’t tell you the price of shoes. You find a document stating that in the year 301, emperor diocletian issued an "edict on prices. " you don’t, however, know whether he imposed price ceilings or price floors—your latin is a little rusty. However, you can clearly tell from the documents that the number of shoes exchanged in markets fell dramatically. The sources also say that both potential shoe sellers and potential shoe buyers were unhappy with the edict. With the information given, can you tell whether diocletian imposed a ceiling or a floor?.

Answer 1

Emperor Diocletian's Edict on Maximum Prices in 301 was a price ceiling intended to curb inflation by setting maximum prices for shoes and other goods, leading to market shortages and dissatisfaction among sellers and buyers.

Step-by-step explanation:

Given the historical context, Emperor Diocletian issued the Edict on Maximum Prices in 301 to address the financial crisis and rampant inflation in the Roman Empire. This edict was a form of price control known as a price ceiling, which was meant to prevent prices from rising above a certain level. The aim was to make goods more affordable and curb inflation by setting a maximum selling price for shoes and other goods.

However, considering that the number of shoes exchanged in markets fell dramatically and both sellers and buyers were unhappy suggests that the price ceiling was set too low. A price ceiling set below the market equilibrium can lead to shortages, as producers may not find it profitable to sell at the lower price, and consumers may find the lower-priced goods difficult to obtain. This aligns with the discontent mentioned among potential shoe sellers, who would be unhappy with the lower profits, and potential buyers, who might struggle to find shoes available for purchase.

Therefore, the evidence suggests that Diocletian imposed a price ceiling, not a price floor, resulting in a decrease in shoe production and dissatisfaction among both shoe sellers and buyers due to the shortages this created.