What Is A “Rigid Market?”

The real problem in 1973 was the price controls on gasoline that kept the legal ceiling price below equilibrium. Quantity demanded exceeded quantity supplied and some form of non-price rationing was required. In this case, it was one of the most common forms, namely queues. Period. No economist worthy of the name doubts this. How Marketplace can get things this wrong is, well, a wonderment. Continue Reading →