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Shortage and Coupons

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  • Han Aiming

Abstract

Coupons are likely to appear when the supply of commodities is smaller than the demand. This phenomenon usually is closely related to low productivity and a change in consumers' tastes, that is, a change in the demand. When productivity is low there are extensive shortages, and the demand is high compared with the supply. The way to solve this imbalance is either to raise the price of the commodities in shortage or issue coupons so there is an equal distribution among consumers. With a rise in productivity the supply increases, and the tension between supply and demand is reduced. As a result, coupons gradually will disappear when the supply satisfies the consumers' demand.

Suggested Citation

  • Han Aiming, 1991. "Shortage and Coupons," Chinese Economy, Taylor & Francis Journals, vol. 24(4), pages 69-75, July.
    • Handle: RePEc:mes:chinec:v:24:y:1991:i:4:p:69-75
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