INTRODUCTION

Ignorantia legis non excusat or Ignorance of the law is not an excuse

Salus populi suprema lex or The welfare of the people shall be the supreme law

Republic Act No. 7581 also known as Price Act was approved way back May 27, 1992, this is

an act providing protection to consumers by stabilizing the prices of basic necessities and prime

commodities and by prescribing measures against undue price increases during emergency

situations and like occasions the law specifically provides the measures on how to control the

prices of goods and also it controls those businesses who will attempt to defied the laws. Firstly,

the law makes a susceptible and unconstrained synthesis that would help the consumers from

mapagsamantalang seller. Actually there are three requisites as far as price is concerned, to wit:

1.) It must be serious, and such as may be demanded, 2.) That the price must be certain and

determinate and 3.) That it consists in money, to be paid down, or at future time, for it is of

anything else, it will no longer be a price, or the contract a sale, but exchange or barter.

All of the foregoing is relative to the said act, although, there are some criteria to test the

credibility of those businesses in imposing the proper price as provided in the said act. A usual

price will become out of date if it has not been charged for a reasonable period of time. There is

no size-fits-all rule for when a usual price will become out of date- this will depend on a number

of things such as what the good or service is and the market in which it is being sold. It is

therefore important that businesses, particularly those who frequently discount their goods and

services, take real care when claiming discounts off a usual price. If businesses continually sell

products at a promotional price then the promotional price becomes the usual selling price. It
would be misleading for a business to continue to claim it was discounting a price when that

price had become the usual selling price.

In addition, there are two (2) types of related price scheme, to wit: 1.) Price Controls and 2.)

Price Fixing, in the two types of price scheme the law specifically provides the definition of it

based on what are the means employed in order for such to become effective. As to the definition

are the following: Price Controls are governmental restrictions on the prices that can be charged

for goods and services in a market. The intent behind implementing such controls can stem from

the desire to maintain affordability of staple foods and goods, to prevent such gouging during

shortages, and to slow inflation, or, alternatively, to ensure a minimum income for providers of a

certain goods or a minimum wage. There are two primary forms of price control, a price ceiling,

the maximum price that can be charged, and a price floor, minimum price that can be charged.

Historically, price controls have often been imposed as part of a larger incomes policy package

also employing wage controls and other regulatory elements. Although price controls are

sometimes used by governments, economist usually agree that price controls dont accomplish

what there are intended to do and are generally to be avoided. For example, nearly three-quarters

of economists surveyed disagreed with the statement. Wage-price controls are useful policy

option in control of inflation.

The other one is price fixing whereby, it is an agreement between participants on the same side in

a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the

market conditions such that the price is maintained at a given level by controlling supply and

demand. The intent of price fixing may be to push the price of a products as high as possible,

generally leading to profits for all sellers but may also the goal to fix, peg, discount, or stabilize

prices. The defining characteristic of price fixing is any agreement regarding price whether
expressed or implied. The price fixing requires a conspiracy between seller or buyers. The

purpose is to coordinate pricing for mutual benefit of the traders. Actually, price fixing is

permitted some markets but not others; where allowed, it is often known as resale price

maintenance or retail price maintenance.

The government by virtue of the powers vested upon them by the supreme law of the land

manned the immediate and proper implementation of the said act, whereby it stretches the

different terms as to described the areas on how consumers reacted in the past, present and future

scenarios as far as prices is concerned.

 DISADVANTAGES

The Republic Act 7581 is also known as the Price control act, a policy of the state that was

implemented to control the prices of basic necessities and of the consumer and to guarantee them

that all of these will be taken at a reasonable price.

This policy series as a useful tool for the consumers to meet and to satisfy all their needs but

despite of the advantages that the consumer acquire in this policy, still there are probable effects

which maybe considered unfavorable or disadvantage to the consumers. One of the

disadvantages of this policy is the effect of the Price Control which is the Price ceiling where in

this is one way of the state to sell basic and primary products at a lower cost. The mandated Price

ceiling may affect the demand and supply in the market, for example during extreme crisis, the

government will command the producer to lessen the amount/prices of their goods and

commodities, so there is a tendency that consumers will purchase goods in excess of their normal

requirements in order to avert shortage. But the question is, how about those underprivileged

people who cant afford to avail or purchase goods? Where will they get their foods? Knowing

that the demands of the people continuously increasing, So with that while the demand is

increasing, So with that while the demand is increasing, the supply will decreased so it is an

evident that shortage in supply will basically appear. What if, that happens? Where will they get

same supplies? Does the government will still satisfy the needs of their people? That was the big

question.

Another disadvantage is that, what if the suggested price of the government is still at a higher

cost? Is it possible for some of the consumer to purchase basic necessities? Can they still manage

to satisfy their needs? Well its case to case basis. Then if that happens, few consumers only will

have the power to purchase, so definitely producers will experience excess of supply or
commonly known as surplus

We cannot deny the fact that in every advantages there is an equivalent disadvantages, so all the

government have to do is to be very careful when it comes in decision making. They need to

make sure that they have alternatives whenever their actions failed. They should plan at all

instances, which will enable them to anticipate future opportunities and problems and evaluate

probable effects of various forces and alternative courses of action.