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Shortage
In economics, a shortage or excess demand is a situation in which the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply ( surplus). Definitions In a perfect market (one that matches a simple microeconomic model), an excess of demand will prompt sellers to increase prices until demand at that price matches the available supply, establishing market equilibrium. In economic terminology, a shortage occurs when for some reason (such as government intervention, or decisions by sellers not to raise prices) the price does not rise to reach equilibrium. In this circumstance, buyers want to purchase more at the market price than the quantity of the good or service that is available, and some non-price mechanism (such as "first come, first served" or a lottery) determines which buyers are served. So in a perfect market the only thing that can cause a shortage is price. In common use, the term "shortage" may refer to a situat ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Rationing
Rationing is the controlled distribution (marketing), distribution of scarcity, scarce resources, goods, services, or an artificial restriction of demand. Rationing controls the size of the ration, which is one's allowed portion of the resources being distributed on a particular day or at a particular time. There are many forms of rationing, although rationing by price is most prevalent. Rationing is often done to keep price below the market clearing, market-clearing price determined by the process of supply and demand in an free market, unfettered market. Thus, rationing can be complementary to incomes policies, price controls. An example of rationing in the face of rising prices took place in the various countries where there was rationing of gasoline during the 1973 energy crisis. A reason for setting the price lower than would clear the market may be that there is a high input , which would drive the market price very high. High prices, especially in the case of necessitie ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Price Gouging
Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair by some. This commonly applies to price increases of basic necessities after natural disasters. Usually, this event occurs after a demand or supply shock. The term can also be used to refer to profits obtained by practices inconsistent with a competitive free market, or to windfall profits. In some jurisdictions of the United States during civil emergencies, price gouging is a specific crime. Price gouging is considered by some to be exploitative and unethical and by others as a pejorative term for the simple result of supply and demand. Price gouging is similar to profiteering but can be distinguished by being short-term and localized and by being restricted to essentials such as food, clothing, shelter, medicine, and equipment needed to preserve life and property. In jurisdictions where there is no such crime, the term may ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Supply And Demand
In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris_paribus#Applications, holding all else equal, the unit price for a particular Good (economics), good or other traded item in a perfect competition, perfectly competitive market, will vary until it settles at the market clearing, market-clearing price, where the quantity demanded equals the quantity supplied such that an economic equilibrium is achieved for price and quantity transacted. The concept of supply and demand forms the theoretical basis of modern economics. In situations where a firm has market power, its decision on how much output to bring to market influences the market price, in violation of perfect competition. There, a more complicated model should be used; for example, an oligopoly or product differentiation, differentiated-product model. Likewise, where a buyer has market power, models such as monopsony will be more a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Price Control
Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of goods even during shortages, and to slow inflation, or alternatively to ensure a minimum income for providers of certain goods or to try to achieve a living wage. There are two primary forms of price control: a price ceiling, the maximum price that can be charged; and a price floor, the minimum price that can be charged. A well-known example of a price ceiling is rent control, which limits the increases that a landlord is permitted by government to charge for rent. A widely used price floor is minimum wage (wages are the price of labor). Historically, price controls have often been imposed as part of a larger incomes policy package also employing wage controls and other regulatory elements. Although price controls are routinely used by go ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Excess Supply
In economics, an excess supply, economic surplus market surplus or briefly supply is a situation in which the quantity of a good or service supplied is more than the quantity demanded, and the price is above the equilibrium level determined by supply and demand. That is, the quantity of the product that producers wish to sell exceeds the quantity that potential buyers are willing to buy at the prevailing price. It is the opposite of an economic shortage ( excess demand). In cultural evolution, agricultural surplus in the Neolithic period is theorized to have produced a greater division of labor, resulting in social stratification and class. Prices Prices and the occurrence of excess supply illustrate a strong correlation. When the price of a good is set too high, the quantity of the product demanded will be diminished while the quantity supplied will be enhanced, so there is more quantity supplied than quantity demanded. The occurrence of excess supply either leads to the l ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economic Surplus
In mainstream economics, economic surplus, also known as total welfare or total social welfare or Marshallian surplus (after Alfred Marshall), is either of two related quantities: * Consumer surplus, or consumers' surplus, is the monetary gain obtained by consumers because they are able to purchase a product for a price that is less than the highest price that they would be willing to pay. * Producer surplus, or producers' surplus, is the amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for; this is roughly equal to profit (since producers are not normally willing to sell at a loss and are normally indifferent to selling at a break-even price). The sum of consumer and producer surplus is sometimes known as social surplus or total surplus; a decrease in that total from inefficiencies is called deadweight loss. Overview In the mid-19th century, engineer Jules Dupuit first propounded the concept of e ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Queue Area
Queue areas are places in which people queue (first-come, first-served) for goods or services. Such a group of people is known as a ''queue'' (British English, British usage) or ''line'' (American English, American usage), and the people are said to be waiting or standing ''in a queue'' or ''in line'', respectively. Occasionally, both the British and American terms are combined to form the term "queue line". Examples include checking out groceries or other goods that have been collected in a self service Retailing#Shops and Stores, shop, in a shop without self-service, at an Automatic Teller Machine, ATM, at a ticket desk, a city bus, or in a taxi stand. Queueing is a phenomenon in a number of fields, and has been extensively analysed in the study of queueing theory. In economics, queueing is seen as one way to rationing, ration scarcity, scarce goods and services. Types Physical History The first written description of people standing in line is found in an 1837 book, '' ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Grey Market
A grey market or dark market (sometimes confused with the similar term "parallel import, parallel market") is the trade of a commodity through distribution channels that are not authorised by the original manufacturer or trademark proprietor. Grey market products (grey goods) are products traded outside the authorised manufacturer's channel. Etymology Manufacturers of computers, telecom, and technology equipment often sell these products through distributors. Most distribution agreements require the distributor to resell the products strictly to end users. However, some distributors choose to resell products to other resellers. In the late 1980s, manufacturers labelled the resold products as the "grey market". Description Grey market goods are goods sold outside the authorized distribution channels by entities which may have no relationship with the producer of the goods. This form of parallel import frequently occurs when the price of an item is significantly higher in one ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Black Market
A black market is a Secrecy, clandestine Market (economics), market or series of transactions that has some aspect of illegality, or is not compliant with an institutional set of rules. If the rule defines the set of goods and services whose production and distribution are prohibited or restricted by law, non-compliance with the rule constitutes a black-market trade since the transaction itself is illegal. Such transactions include the illegal drug trade, prostitution (where prohibited), illegal currency transactions, and human trafficking. Participants try to hide their illegal behavior from the government or regulatory authority. Cash is the preferred medium of exchange in illegal transactions, since cash transactions are less easily traced. Common motives for operating in black markets are to trade contraband, avoid taxes and regulations, or evade price controls or rationing. Typically, the totality of such activity is referred to with the definite article, e.g., "''the' ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Opportunity Costs
In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the "cost" incurred by not enjoying the ''benefit'' that would have been had if the second best available choice had been taken instead. The '' New Oxford American Dictionary'' defines it as "the loss of potential gain from other alternatives when one alternative is chosen". As a representation of the relationship between scarcity and choice, the objective of opportunity cost is to ensure efficient use of scarce resources. It incorporates all associated costs of a decision, both explicit and implicit. Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure, or any other benefit that provides utility should also be considered an opportunity cost. Types Expl ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Transaction Costs
In economics, a transaction cost is a cost incurred when making an economic trade when participating in a market. The idea that transactions form the basis of economic thinking was introduced by the institutional economist John R. Commons in 1931. Oliver E. Williamson's ''Transaction Cost Economics'' article, published in 2008, popularized the concept of transaction costs. Douglass C. North argues that institutions, understood as the set of rules in a society, are key in the determination of transaction costs. In this sense, institutions that facilitate low transaction costs can boost economic growth.North, Douglass C. 1992. "Transaction costs, institutions, and economic performance", San Francisco, CA: ICS Press. Alongside production costs, transaction costs are one of the most significant factors in business operation and management. Definition Williamson defines transaction costs as a cost innate in running an economic system of companies, comprising the total costs of ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Government Intervention
A market intervention is a policy or measure that modifies or interferes with a market, typically done in the form of state action, but also by philanthropic and political-action groups. Market interventions can be done for a number of reasons, including as an attempt to correct market failures, or more broadly to promote public interests or protect the interests of specific groups. Economic interventions can be aimed at a variety of political or economic objectives, including but not limited to promoting economic growth, increasing employment, raising wages, raising or reducing prices, reducing income inequality, managing the money supply and interest rates, or increasing profits. A wide variety of tools can be used to achieve these aims, such as taxes or fines, state owned enterprises, subsidies, or regulations such as price floors and price ceilings. Basic forms Price floor and ceiling file:European Wheat Prices - A Price Floor Example.jpg, alt=a supply- ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
