Rationing And Hoarding

Rationing Rationing is an economic circumstance characterized by a shortage of essential commodities in the market. Under this condition, consumers are granted access to these commodities in specified quantities and regulated time intervals. The scarcity of essential goods may be artificially induced, often by certain individuals aiming to derive super-normal profits from their sales.   […]

Rationing

Rationing is an economic circumstance characterized by a shortage of essential commodities in the market. Under this condition, consumers are granted access to these commodities in specified quantities and regulated time intervals. The scarcity of essential goods may be artificially induced, often by certain individuals aiming to derive super-normal profits from their sales.

 

Impacts of Rationing:

  1. Denies certain individuals’ access to essential commodities.
  2. Involves struggles and uncertainties.
  3. Insufficient rationing negatively impacts people’s standard of living.

 

Hoarding

Hoarding refers to a deliberate action taken by a seller or producer to create an artificial scarcity of a specific commodity by storing it and refraining from releasing it to the market. This tactic is often employed to inflate the selling price of commodities to make excessive profits, or by refusing to adhere to the government-regulated lower prices for essential commodities.

 

Impacts of Hoarding:

  1. Leads to artificial scarcity.
  2. Causes prices to rise.
  3. Non-availability of goods due to artificial scarcity affects the economic and material well-being of the people.

 

Black Market

The black market is a market situation where trading transactions and resource allocations occur outside the conventional norms of market forces, demand and supply, or government-set prices for essential commodities. This market pattern deviates from the fundamental principles of open exchange, operating in secrecy and hence earning its designation as the black market.

 

Impacts of the Black Market:

  1. Leads to the exploitation of consumers.
  2. Results in favouritism, corruption, and bribery.
  3. Adversely affects economic growth and development.
  4. Creates opportunities for abnormal profits for some producers.

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