Question regarding command economies and microeconomics? ?
My textbook states the following about command economies: "Producers in command economies like China before 1980 or the Soviet Union before 1991 routinely found themselves unable to produce because they did not have crucial raw materials, or if they succeeded in producing, they found nobody wanted their products. Consumers were often unable to find necessities like toilet paper or milk. Command economies are infamous for long lines at shops" (Krugman 2).
I feel this is contradictory because first it states that "nobody wanted the products". Then, it goes on to state that "command economies have long lines". If nobody wanted the products, why are there long lines?
- JuanBLv 71 month agoFavourite answer
Exactly, your textbook doesn't give enough space to talk about it. I would say partially explained by some products nobody wanted, other products their were long lines. And yes, some there was both. Part of the system included cheap prices. I recall it explained as if you have a price below equilibrium then other factors other than money will kick in so be prepared to line up for a good in shortages. And a lot of those Soviet line ups were for food.
But I'd also argue one example that was both unwanted with a lineup was cars. They produced cheap Junkers of cars. Nobody really wanted them, but it was all you could get. So, the waiting list to get them could be over a year.
- darkvelvetrainLv 71 month ago
Nobody wanted the products they produced, but people still needed necessities, which could only be obtained by standing in long lines.