It's truly saddening to see people queing up for hours trying to get gasoline. But isn't this exactly what happens if you keep holding prices down distortively? I have been telling this to my classes. Now they can see one perfect example. BBM prices have been false all these years. They're not the true signal of what is going on in the market. You face a lower price than. You would think you could easily buy the product with your money -- well, it's cheap. As it turns out, when you go to the marketplace, the good is rare. Why? What's going on? Because the prices are wrong. Now you have to compete with others to get the remaining litres. Hm, sounds like an opportuinity for rent-seeking by the suppliers. Hence the blackmarket.
Solution? None. Nothing, unless you are willing to listen -- even if it's not popular.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment