Rationing & Hoarding


Welcome to class! 

In today’s class, we will be talking about rationing & hoarding. Enjoy the class!




  • Meaning of Rationing and Hoarding
  • Effects of  Rationing and Hoarding
  • Black Market and its Effects



It is a prevailing economic situation of scarcity of essential commodities in the market in which consumers are allowed to have access to these commodities at specified quantities and at a regulated period of times. The scarcity of these essential commodities in the market may be man-made, and which is known as artificial scarcity,  created majorly by some people to make supernormal profits from the sales of their goods.

Effects of Rationing
  1. It denies some people access to essential commodities
  2. It involves struggle and uncertainty
  3. Insufficient rationing affects people standard of living

It is a situation in which a deliberate effort is made by a seller or a producer of a particular commodity who decides to create artificial scarcity of such commodity by keeping it locked up in his store and not releasing it to the market to circulate for sales. Hoarding of essential goods can be done deliberately to push the selling price of commodities up to make abnormal profits or by refusing to sell at the regulated lower price fixed by law for essential commodities by the government.

Effects of Hoarding
  1. It leads to artificial scarcity.
  2. It makes the price to go high.
  3. Non-availability of goods through artificial scarcity affects economic and material welfares of the people.

It is a market situation where trading transactions and allocation of resources are being carried on outside the conventional norm or principle of market forces of demand and supply or the price fixed by law for essential commodities by the government. This is a market pattern which does not abide by the simple principle of the market forces of demand and supply, and thus shrouded in secrecy, where an exchange of goods and services cannot be done openly. Hence, the reason why it is called a black market.

Effects of Black Market
  1. It leads to exploitation of consumers.
  2. It leads to favouritism, corruption and bribery.
  3. It adversely affects the growth and development of the economic.
  4. It creates an avenue for abnormal profits for some producers.
  1. Give five reasons why Government participates in business enterprises.
  2. Define the ageing population.
  3. Explain the sources of Finance available to a public limited liability business.
  4. Explain any three weapons that can be used by a trade union during a trade dispute.
  5. What is occupational mobility? 


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