What Price Means

Censoring Pleas for Help (1/23/1999)

Price control after natural disasters may misallocate scarce resources to less urgent needs

Keywords: censorship, electric generator, morality, natural disaster, price control, price gouging, profiteering

Demand Elasticity and Total Revenue (11/2/2011)

A linear downward-sloping demand curve has a range of demand elasticities and an inverted U-shaped total revenue curve under single pricing.

Keywords: demand elasticity, elastic demand, inelastic demand, total revenue

Excess Demand Blues - Scalpers profit from ticket shortage (2/23/2004)

Excess demand generated by low concert ticket price created profitable opportunity for scalpers.

Keywords: black market, concert, excess demand, market clearing, scalper, scalping, shortage, ticket price

Gray Market (11/5/1999)

Gray markets appear when cheaper goods in one market are diverted to compete with more expensive but similar goods in another market.

Keywords: cigarettes., distributors, diversion, diverters, gray market, high-end market, low-end market, parallel imports, price discrimination

Happy Hogging! (1/16/2006)

Price hikes in anticipation of shortages can lead to re-allocation of scarce resources to higher-valued uses.

Keywords: gas, hoarding, Katrina, panic buying, price gouging, radio ad spots, resource allocation, shortage

Hedging Inflation with Prostitution (1/30/2015)

Prostitution has proven to be an effective hedge against high inflation induced by subsidies and price control in Venezuela.

Keywords: Bolivar, currency trader, devaluation, dollar, exchange rate, inflation, inflation hedge, price control, prostitutes, Smuggling, subsidized gas, Venezuela

Is a Fine a Price? (9/1/2005)

A fine which normally connotes shame can be confused with a price which connotes right if a fine is not properly implemented.

Keywords: day care, daycare, fine, price, pricing, tardiness, tardy

Lounging in Luxury - Can You Afford It? (1/29/2014)

The value of luxury goods can be preserved only if access to them is restricted.

Keywords: airport lounge, airport lounge, Delta, elastic demand, elasticity of demand, experience good, inelastic demand, luxury good, membership, price hike

Marginal Cost and Average Total Cost (transcript) (1/29/2012)

Marginal cost and average total cost can be derived from the short-run total cost subject to the law of diminishing returns.

Keywords: ATC, average total cost, law of diminishing returns, marginal cost, MC, TC, total cost

One-Price Law – Making an Illegal Buck (2/27/2007)

Artificially-imposed price difference between markets can lead to flow of goods from short-supplied areas to well-supplied areas to equalize their effective prices.

Keywords: arbitrage, China, diesel, gasoline, Hong Kong, material flow, one-price law, price control, red oil, smuggling, subsidy, tax, Vietnam

Price Gouging - Historical vs Opportunity Cost cartoon (10/8/2017)

Pricing at opportunity cost rather than historical cost can solve market shortages. In other words, "price gouging" can be an unsung hero.

Keywords: cartoon, historical cost, opportunity cost, price gouging, scarcity, shortage

Price Signals as Guides for Resource Allocation (7/7/2006)

High prices for scarce resources ensure that these resources will be used for only high-valued purposes.

Keywords: congestion, garbage, market, Price signals, recycle, resource allocation, toll

Prices and Sanctions? (8/13/1999)

Prices compel decision makers to consider the monetary costs of their acts, whereas sanctions deter people from doing what is wrong.

Keywords: community standards, external costs, law, parking, penalty, prices, sanctions, speeding

Rent Ceiling (8/31/2000)

Rent control in Boston, MA has led to most apartments charging rent right up to the price ceiling. The effective rent is actually higher if under-the-table payments are included.

Keywords: apartments, black market, Boston, equilibrium price, price ceiling, rent ceiling, rent control, shortage, under-the-table payment

Should parking be free? (11/2/2011)

Free parking generates lower total benefit when parking spaces are scarce.

Keywords: consumer surplus, free parking, paid parking

Should parking be free? (transcript) (3/27/2007)

Narrated lecture comparing total benefits under free vs paid parking when parking spaces are scarce.

Keywords: consumer surplus, paid benefit, parking fee, total benefits

Slippery Oil (9/7/2005)

Oil is a fungible world commodity that should be sourced where it is the cheapest and sold to the highest bidder regardless of national boundaries.

Keywords: Alaska, ANWR, conservation, energy independence, oil, price

Sugar Daddy (6/22/2006)

US subsidies to domestic sugar cane and sugar beet growers have resulted in huge collateral damage to domestic industries and overseas producers.

Keywords: candy, import quota, price support, subsidies, sugar, sugar beet, sugar cane

Supply and demand (11/2/2011)

Market prices and quantities supplied and demanded are determined by the interactions between supply and demand.

Keywords: demand, demand shift, excess demand, excess supply, price determination, shortage, supply, supply shift, surplus

Supply and demand (transcript) (3/27/2007)

Narrated lecture on supply and demand curves and price determination under free market.

Keywords: demand, excess demand, excess supply, quantity demanded, quantity supplied, shortage, supply, surplus

Surge Pricing Ride Service (12/13/2014)

Dynamic pricing allows mobile-dispatched ride services such as Uber to digitally match supply and demand at the expense of regular taxi companies.

Keywords: dynamic pricing, medallion, price gouging, surge pricing, taxi, tip, Uber

The Case for Sweatshops (1/23/1999)

Sweatshops in low wage countries supplying goods to American companies may offer better paying jobs than other local firms.

Keywords: free trade, low wage labor, morality, sweatshops, trade

Underground Sins (1/14/2006)

High sales tax on cigarettes inadvertently encouraged underage smoking and reduced tax revenues.

Keywords: Canada, cigarette, contrabands, sales tax, sins, smuggling, tax revenues

Auction of immigrant visas could ensure that scarce visas go to only those who are willing to pay the most to get them and that immigrants do not displace native-born workers simply because of their willingness to accept lower pay.

Keywords: armed forces, citizenship, illegal immigrant, immigrant visa, investor visa, net pay, skilled workers, visa auction, volunteer armed services, wages

Who Is Over a Barrel? (1/20/2015)

The impact of low oil prices on oil output depends on the cost structures of different types of oils.

Keywords: demand, fixed cost, oil sands, OPEC, shale oil, supply, variable cost