GENERAL KNOWLEDGE

Detailed explanation-1: -Rationing is the limiting of goods or services that are in high demand and short supply. It is often undertaken by governments as a way of mitigating the impact of scarcity and dealing with economic challenges.

Detailed explanation-2: -In neoclassical economic theory, the rationing function of price apportions commodities to the individuals willing to pay the most for them. If willingness to pay reflects value, then the rationing function of price maximizes value across all consumers.

Detailed explanation-3: -The rationing function of prices means that the buyers and sellers synchronize their decisions through the price system and arrive at the decision on which commodity to buy. Buyers are able to compare and matches all the prices of commodities sold in the market and buy that product that maximizes his or her utility.

Detailed explanation-4: -The government can pursue two main types of rationing in economics to tackle crises: non-price rationing and price rationing.