ECO 202 Module 1 Discussion - Prices serve a rationing function

ECO 202 Module 1 Discussion - Prices serve a rationing function

Question # 00749631 Posted By: dr.tony Updated on: 01/22/2020 12:55 PM Due on: 01/22/2020
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ECO 202 Module 1 Discussion

Prices serve a rationing function. When quantity demanded exceeds quantity supplied, prices rise to alleviate the shortage. When quantity supplied exceeds quantity demanded, prices fall to alleviate the surplus. However, when prices are inflexible, shortages and surpluses persist. Other rationing mechanisms must develop.

  • Using demand and supply analysis, describe a specific situation where a shortage occurred. Why were prices unable to adjust in this market?
  • Combining what you learned from your readings as well as from the video clip, what other rationing functions could develop to alleviate the shortage?
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  1. dr.tony
    Tutorial # 00748187 Posted By: dr.tony Posted on: 01/22/2020 12:56 PM
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