These Widespread Shortages Can’t Be Explained by Supply Constraints Alone

Source: Foundation for Economic Education
by Walter Block

“Basic introductory Economics 101 teaches us that a shortage occurs when demand for an item exceeds its supply. What invariably occurs then? Why, prices rise. When this takes place, businesses are incentivized to produce more, buyers to purchase less. Voila, the shortage ends. Why doesn’t this occur under the Biden Administration? Why do we have so many shortages? One possibility not at all in the public eye is that business firms are afraid to raise prices lest they be charged with price gouging.” [editor’s note: The major evidence for that possibility would be prices not rising. But in fact prices are rising faster than they have in decades – TLK] (06/21/22)