3 ms·
There are three alternativies when supply is short: 1) Increase prices until demand matches supply. 2) Price controls, usually leading to empty shelves. 3) R
by trashtester 4y ago
There are three alternativies when supply is short:
1) Increase prices until demand matches supply.
2) Price controls, usually leading to empty shelves.
3) Rationing.
1 is preferrable in 99% of cases. 2 is always the worst. 3 is needed during extraordinary times, such as when a country is in an all-out war.
- 8note 4y ago1 is rationing too, just rationing to prioritize the wealthy. The more modern versions ration based on other things, like how to combat ticket scalping, bands release tickets through alternative means
- trashtester 4y ago1 is the capitalist way while 3 is the socialist way to distribute goods. The first works best under normal market condition, as it encourages economic growth, while the latter works better under special conditions where the scarcity is severe, unavoidable and caused by temporary factors (such as a war).