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Price increase indicates a shortage, since the purpose of a price increase is to select which sunset of consumers receive the product when not all can. Price in
by lonelappde 7y ago
Price increase indicates a shortage, since the purpose of a price increase is to select which sunset of consumers receive the product when not all can. Price increases are either free market rationing (a response to shortage) or a disappearance of readily accessible inputs.
- nradov 7y agoThat's not how shortages work. A shortage only exists when some external constraint prevents the market from clearing.