What happens when prices aren't allowed to accurately reflect demand and supply? Gas Lines! Welcome back to the '70's.!
I suppose some (Governor Christie, Governor Cuomo, Mayor Bloomberg) think this is a good way to allocate scarce resources, but I don't understand how standing in line does anyone much good.
There is an easy way to stop the lines: let the price rise. Voila! Problem solved! That's unfair some will say. Only rich people will get gas others will say. No, only those who value gas at the higher price and are able to pay for it will get gas. No different than the market for iPhones, Teslas, houses, milk etc. On the one hand signals and incentives to producers to produce more and consumers to consume less. On the other hand? Gas lines!
Bill,
PS. Same concepts apply to health care and colleges. The results are similarly inefficient.
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