Questions have been repeatedly raised on the possible impact of price control policies of the government on location, investment, size, choice of technology, efficiency, and growth of industries. While not minimizing the importance of other questions, this paper concentrates on the impact of price control policies on location of the cement industry. The main point the paper makes is that the system, as it operates now, has undesirable effects of location. However, such effects can be overcome by modifying the existing system as suggested in the paper.