> Regulating the price to a point well below the free market supply/demand driven price causes a decrease in the amount of bread supplied to the market.
In some countries like Egypt, bread (or another basic staple) is heavily subsidized below the free market price, but that doesn’t seem to meaningfully impact the market’s supply: any consumer able to pay that artificially low price can still eat all the bread he or she wants.
Subsidies are different from price ceilings; subsidies often spur over-production along with over-consumption (think HFCS), whereas price ceilings discourage production and encourage hoarding (arguably a form of over-consumption). Price ceilings also foster a domestic black market, whereas subsidies foster an export black market.
I agree that subsidies perturb the free market, but in this case to the side of increasing supply. (You can model it as the supply curve being shifted downward by the amount of the government subsidy.)
In some countries like Egypt, bread (or another basic staple) is heavily subsidized below the free market price, but that doesn’t seem to meaningfully impact the market’s supply: any consumer able to pay that artificially low price can still eat all the bread he or she wants.