Question

Highlight 6 effects on rationing

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.

Explanation:

• The greater the scarcity, the higher the price and the more the resource is rationed.