The Price Mechanism
Munger and Roberts discuss the role of the price mechanism in allocating resources, using the example of gasoline during a hurricane. They highlight how suppressing prices can lead to shortages and the importance of allowing prices to reflect scarcity in order to ensure a reliable supply.In this clip
From this podcast
EconTalk
Michael Munger on John Locke, Prices, and Hurricane Sandy
Related Questions
How do prices reflect supply and demand in the episode Michael Munger on Price Gouging and the clip The Paradox of Price Gouging?
How do prices act as signals in an economy?
How do prices reflect supply and demand in the episode Michael Munger on Middlemen and the clip Pricing and Profit of the podcast?