Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Economists look at prices in a somewhat different way than non-economists. We look at prices as signals. So to the buyer they indicate the value of the product and how much of your resources you have to give up to get that product. Now we're all going to value products differently, so when a shortage of a product occurs, the problem is, How are we going to ration that limited supply among all the possible users? And for example, if the prices stays the same, and people know there's a shortage, people are going to rush to buy that product, and quickly, it's going to disappear from the shelves or from the gas pumps. Now you could have the government come in and issue ration coupons. In fact, we did that during World War II. The government, however, would have to come up with some means of doing that, have to decide who is going to get the limited product. And it takes time, of course, to issue ration coupons. So an alternative is simply to let the price of a product that's in short supply rise. What that's going to do is signal to buyers that this is a more valuable product right now because it's in short supply, and only those people who put a very high value on it will get it. And what this, again, does is it says to someone, look, if I really need, for example, a flashlight and for some reason flashlight supplies are limited, I know the flashlight is going to be more expensive, but I can go to that store, and it will probably be there because people who don't need a flashlight are going to say, 'Hey, I'm going to wait.' So it preserves the limited supply for folks who really want and need it. That's the value of higher prices during shortages."