Question

If goods are not rationed according to price, if follows that they won't get rationed at all. some non-price rationing device will be used to ration the goods. first-come-first-served will necessarily be the rationing device used in the market. there will be surpluses in the market. g

Answer 1

Some non-price rationing device will be used to ration the goods.

Step-by-step explanation:

Rationing refers to the controlled distribution of a good or service, particularly one that is scarce. When the supply of a particular good or service is below the quantity demanded, this usually means that the price of the product rises, and price acts as a rationing device. However, if goods are not rationed according to price, then it follows that some non-price rationing device will be used instead to ration the goods.

Answer 2

Yes, using the first-come-first-served rationing device will lead to a situation where always be surpluses in the market. If the supply only can use the price as information about the demand, it will also lead to a surplus of the market if the demand is lower than the supply's capacity. Nevertheless, if demand is lower than supply, and supply can forecast and control its production, in order to match with the demand, this could lead to a condition of equilibrium

Step-by-step explanation:

This happens because the best information source in the market is the price. The price indicates when supply and demand match and that happens equilibrium vacuum the market, and there is no surplus.