rationing


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Fig. 165 Rationing.

rationing

a physical method of allocating a product that is in short supply relative to demand (EXCESS DEMAND). In a free market this situation would not arise - the excess demand would be ‘choked off and additional supply encouraged by an increase in the price of the product (see EQUILIBRIUM MARKET PRICE). But if the price is fixed below its equilibrium rate (for example, by the government wishing to hold down the prices of key products such as food), the use of ration tickets provides one practical means of allocating the available supply between consumers on an equitable basis.

In Fig. 165, for example, if the price of a product is fixed by the government at Or, then it is necessary to ration the amount of output that producers are willing to supply, OQr, at this price amongst consumers who are demanding the greater amount of OQs. See also BLACK MARKET, PRICE CONTROLS.

References in periodicals archive ?
Another very common form of rationing is by health condition.
Bloomberg said New York's rationing will be similar to the rules imposed last Saturday in the neighboring state of New Jersey, which has seen long lines reduced and gas stations remain open later since rationing began.
Rationing was not only still in force, but was actually more stringent.
Twenty-five years ago, the late Jeff Merrill and I wrote a guest editorial in Inquiry that tried to dispel myths about rationing in U.
Food rationing was introduced in January 1940 and the first targets for rationing were butter and bacon, but it soon spread to many other foods.
To make matters even worse, electricity theft increased dramatically in many areas which also prompted the company to increase rationing in most areas," the statement said.
TEPCO, which is already under fire for a nuclear crisis involving its nuclear reactors in Fukushima Prefecture, has also been facing criticism over its handling of power rationing as the step was taken on short notice without giving people much time to comprehend what would happen.
Nonetheless, among those in bioethics who have written much on rationing over the years--Norman Daniels, Leonard Fleck, Paul Menzel, Alan Buchanan, Peter Ubel, and myself, for instance--there is a fair degree of consensus.
Beyond that, the fact that some people are unable to pay for insurance isn't any more rationing than my being unable to afford a house the size of Al Gore's homes.
The rising cost of healthcare services combined with the ever increasing problems in public financing worldwide, have recently led to reconsideration of rationing as a convenient method for cost savings in healthcare delivery (OECD 2008).
To deal with extreme shortages, the Ministry of Food instituted a system of rationing.
Almost one in four (23%) doctors said they had witnessed "drug rationing", with some of the most common rationing occurring for cancer drugs, but also for painkillers and arthritis medicines.