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Price Ceiling on…TVs!

November 14, 2013 1 comment

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In Venezuela, a government-mandated “fair price” for electronics at a large retailer has created, to no one’s surprise, excess demand.

How much excess demand?

Members of Venezuela’s National Guard, some of whom carried assault rifles, kept order at the stores as bargain hunters rushed to get inside.

“I want a Sony plasma television for the house,” said Amanda Lisboa, 34, a business administrator, who had waited seven hours already outside one Caracas store. “It’s going to be so cheap!”

Televisions were the most in-demand item in the line outside one Caracas store, though people waited more than eight hours for fridges, washing machines, sewing machines and other imported appliances.

Why would the government impose this price ceiling?

Maduro faces municipal elections on Dec. 8. His popularity has dropped significantly in recent months, with shortages of basic items such as chicken, milk and toilet paper as well as soaring inflation, at 54.3% over the past 12 months.

If you can predict which items will next be in short supply in Venezuela, you just might know more about economics than a certain government official.

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