Watch the video clip from Jingle All the Way. (View Transcript.)
Consider the following:
Prices serve a rationing function. When quantity demanded exceeds quantity supplied, prices rise to alleviate the shortage. When quantity supplied exceeds quantity demanded, prices fall to alleviate the surplus. However, when prices are inflexible, shortages and surpluses persist. Other rationing mechanisms must develop.
Citation: Barnathan, M., Columbus, C., Radcliffe, M. (Producers), & Levant, B. (Director). (1996). Jingle all the way [Motion picture]. United States: Twentieth Century Fox.
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