Definition
- Rationing function
- The rationing function is the way a rising price shares out a scarce good among the buyers most willing and able to pay for it.
Example
Can you think of an example of rationing function?
A band's tour sells out and resale tickets climb from £60 to £200. Fans who will not pay £200 drop out, so the fixed number of seats goes to those who will.
Test yourself
Can you name the three functions of a price?