We've recently discussed the issue of government intervention in the economy in one of my Economics class. Quantity control, also known as quota, is an example government interference. The government controls the amount of goods and services of particular industries and companies and this affects the amount of goods and services supplied in the economy. The New York Times wrote an article called Unfree Enterprise, in which they explained how government intervention is affecting our capitalist economy. The article emphasized how government control is related to a command economy communist Soviet Union and Cuba. Furthermore, the article talks about taxi licenses in New York City. The quotas of licenses have been decreasing ever since 1937.
The New York City license is very small compared to the demand. Taxi medallions are very expensive; this is a technique to keep the medallion price high by limiting quantity. Quota issued by the government is mainly to help keep price high by limiting supply that will increase the demand.