0
They are similar in the sense that they are two solutions to the same problem: There is not enough goods for everyone, so the problem is to decide who gets what.
Price based markets use price as the distribution mechanism, increasing the price until the quantity people are willing and able to buy is in balance with the quantity that is available for sale.
Rationing keeps the price at levels that would be artificially low in a price based marked, and instead use some political mechanism to decide who gets what.
They are similar in the sense that neither mechanism can change the basic fact that there are more wants than there are goods to fill those wants. They differ only in the way they decide on the distribution.
Wiki User
∙ 14y ago
Add your answer:
Earn +20 pts
Why Explain in your own words how the terms rationing and price are related?
Rationing is a system to allocate goods and services without the use of prices. Rationing is when people receive a ration coupon that entitles them to a certain amount of a product.
In a free competitive market what is the rationing mechanism?
Price is the rationing mechanism. Whoever can afford it, will by it.
What are the main effects of price ceiling and rationing?
The following are the main effects of price ceiling and rationing: 1. Beneficial for Poor Consumers: A well managed rationing system enables the poor section of the society to get the commodities which are in short supply. 2. Transfer of Resources: The price ceiling and rationing enable the government to transfer resources from the production of less important uses to more important uses. 3. Black Marketing: The worst effect of rationing is to encourage black marketing.
How does a price ceiling undermine the rationing function of market-determined prices?
A price ceiling will undermine the rationing function of market-determined prices by creating a shortage. This is a price which is below equilibrium which will lead to more demand that supply that will cause a shortage.
What is most closely related to the black market?
production A+
Why Explain in your own words how the terms rationing and price are related?
Rationing is a system to allocate goods and services without the use of prices. Rationing is when people receive a ration coupon that entitles them to a certain amount of a product.
How do price act as a rationing device?
prices can not act as rationing device
In a free competitive market what is the rationing mechanism?
Price is the rationing mechanism. Whoever can afford it, will by it.
What effect did rations have on meat prices?
In the UK, anyway, most food prices were fixed while rationing was in force. One of the main purposes of rationing by coupons was to avoid rationing by price. :)
What are the main effects of price ceiling and rationing?
The following are the main effects of price ceiling and rationing: 1. Beneficial for Poor Consumers: A well managed rationing system enables the poor section of the society to get the commodities which are in short supply. 2. Transfer of Resources: The price ceiling and rationing enable the government to transfer resources from the production of less important uses to more important uses. 3. Black Marketing: The worst effect of rationing is to encourage black marketing.
Which of these is most likely to lead directly to a black market a supply shock b price floor c rationing d equilibrium?
Rationing
How does a price ceiling undermine the rationing function of market-determined prices?
A price ceiling will undermine the rationing function of market-determined prices by creating a shortage. This is a price which is below equilibrium which will lead to more demand that supply that will cause a shortage.
What rationing is an attempt to limit shortage that naturally result from what?
Price ceiling
Rationing is an attempt to limit shortages that naturally result what?
Price ceiling
What is rationing function of price?
Provided that the product is not a Veblen or a Giffen good, as its price increases fewer people can afford the commodity and so the demand for it decreases. This is a form of rationing in which the poorest people are priced out of the market.
Which of the following is most closely related to the black market?
Rationing
What is most closely related to the black market?
production A+
