What constitute a fair price increase at a time of shortage


Problem

Government should implement price controls (e.g., price ceilings on necessity goods) in the wake of a crisis.

A. Discuss what constitute a 'fair' price increase at a time of shortage.

B. If the price is not allowed to rise to its equilibrium level, what system of rationing should be used? How should sellers allocate the good amongst potential customers?

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Microeconomics: What constitute a fair price increase at a time of shortage
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