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In economics, it is often common to use the word "rationing" to refer to one of the roles that prices play in markets, while rationing (as the word is usually used) is called "non-price rationing." Using prices to ration means that those with the most money (or other assets) and who want a product the most get the largest amount, whereas non-price rationing follows other principles of distribution. Below, we discuss only the latter, dropping the "non-price" qualifier, to refer only to marketing done by an authority of some sort (often the government).
In market economics, rationing artificially restricts demand. It is done to keep price below the equilibrium ( market-clearing) price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls.
An example of rationing in the face of rising prices took place in the Netherlands, where there was rationing of gasoline in the 1973 energy crisis.
A reason for setting the price lower than would clear the market may be that there is a shortage, which would drive the market price very high. High prices, especially in the case of necessities, are unacceptable with regard to those who cannot afford them. In wartime, it is usually imperative for a government to maintain the support of this part of the population, to maintain "equality of sacrifice," especially since in most countries, the working-class and poor families contribute most of the soldiers.
Rationing using coupons is only one kind of non-price rationing. For example, scarce products can be rationed using queues. This is seen, for example, at amusement parks, where one pays a price to get in and then need not pay any price to go on the rides. Similarly, in the absence of road pricing, which is infeasible in many or most cases, access to roads is rationed in a first come, first serve queueing process, leading to congestion.
Authorities which introduce rationing often have to deal with the rationed goods being sold illegally on the black market.
Rationing has long been used in the militaryMilitary (from latin militarius miles "soldier") as an adjective describes anything related to soldiers and warfare. Used as a noun, it is equivalent to Armed force. See also Armed force Martial art Militaria Military history Military rule Military by cou, especially the navyA navy is the branch of the military that operates primarily on water. Most (but not all) armed forces make considerable distinction between the land-based warfare of an Army, the sea-based warfare of a Navy, and the air-based warfare of an Air Force ofte, to make supplies last for a defined duration, such as a voyage. To ration the supplies, they are divided up into equal portions for each person for each day, or even a meal, over the expected voyage period. The objective is to ensure that each person receives a fair share of supplies throughout the voyage. Often some reserve was also held. If supplies ran short or the voyage went longer than expected, the ration portions would be reduced. For example, half rations means the portions are cut in half, making the supplies last twice as long.
Rationing is often instituted during wartime for civilians as well. For example, each person may be given "ration coupons" allowing him or her to purchase a certain amount of a product each month. Rationing often includes foodFood is any substance normally eaten or drunk by living organisms. The term food also includes liquid drinks. Food is the main source of energy and of nutrition for animals, and is usually of animal or plant origin. The study of food is called food scienc and other necessities for which there is a shortage, including materials needed for the war effort such as rubberThis article is about the material rubber, for other uses see Rubber (disambiguation Rubber is an elastic hydrocarbon polymer which occurs as a milky emulsion (known as latex) in the sap of a number of plants but can also be produced synthetically. The ma tireA tire ( US spelling) or tyre ( UK spelling) is a roughly toroidal piece of (usually) rubber placed on a wheel to cushion it. Tires generally have reinforcing threads in them; based on the orientation of the threads, they are classified as bias-ply/ crosss, leatherLeather is a material created through the tanning of hides, pelts and skins of animals. Leather was a very important clothing material, and its other uses were legion. Together with wood, leather formed the basis of much ancient technology. Leather with t shoeFootwear A shoe is a piece of footwear for humans, less than a boot and more than a slipper. This footwear is shaped to fit the foot (or the area below the ankle) with a flexible upper part of leather (or plastic) usually and a sole and heel of heavier mas, clothing and gasoline. Towards the end of the First World War, panic buying in Britain prompted rationing of first sugar, then meat, for the rest of the war. During World War II rationing existed in many countries including Britain and the United States. The British Ministry of Food refined the process in the early 1940s to ensure the population did not starve when food imports were severely restricted and local production limited due to the large number of men fighting the war. Rationing did not end in Britain until the 1950s – see also British cuisine.
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