Question

Effect of rationing and hoarding in economics

Answer 1

Answer:

Rationing distorts consumer behavior since consumers cannot purchase their desired quantities at government controlled prices. Since consumers incur smaller than desired expenditures for rationed goods and services, rationing may lead to increased demand for other commodities that can be purchased freely.

Secondary economic effects result from hoarding. Hoarding is an increase in demand. In the short-run with supply fixed, the price of the hoarded good would increase. With every increase-in demand, the price of the hoarded good would continue rising producing inflation.

Answer 2

The aim of hoarding is to economics is o create artificial scarcity and rise the demand.

Explanation:

• The hoarding is commonly done to create a shortage of goods and services. They are done to create a cycle of speculation and to create inflation in the economy.  

• The process of the goods will rise if they are collectively stored. The merchant might hold back the supplies in order to wait for future prices to increase.

• Thus panic the buyers by creating a shortage of demands. It may also create a situation of starvation if it continues beyond a point. Hoarding can create price fixation and artificial scarcity.

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• brainly.in/question/13599510 answered by Brainly User.