Monday, November 5, 2012

Why shortages appear

Blame prices that are not allowed to adjust:
Hit by a cascade of complaints from consumers, the New York Attorney General’s Office launched a probe on Monday into price gouging in the state in the wake of Hurricane Sandy.
The complaints centered on gas-price hikes but also include reports of jacked-up prices on everything from emergency supplies like generators to higher hotel rates and loftier prices for food and water.
 “Our office has zero tolerance for price gouging," NY Attorney General Eric Schneiderman said in a statement. "We are actively investigating hundreds of complaints we've received from consumers of businesses preying on victims of Hurricane Sandy, and will do everything we can to stop unscrupulous individuals from taking advantage of New Yorkers trying to rebuild their lives."

Not only do higher prices cause shortages to disappear (by encouraging conservation on the demand side, and increases in supply), but they also give consumers and firms an profit motive to find ways to alleviate shortages in the future. 


  1. Could not be written any better. Looking over this post reminds me of my old room mate! He always kept discussing this. I will forward the next few paragraphs to him. Fairly certain he can have a very good read. Many thanks sharing!
    Nifty Future Tips

  2. Yes absolutely agree with the complaints of hike in price hikes, so focus on these hikes & provide relax to customers.

  3. its a really good work you are listening the complaints of the victim of hurrycane sandy's . and trying to solve for your customer.