Monday, June 30, 2014

Lime Prices are Skyrocketing

The New York Times reports that lime prices are skyrocketing, and the reason is supply and demand.  Although the article states that there is a "shortage", economists use that word to mean that their is a disconnect between quantity demand and quantity supplied at a given price, and that does not seem to be the case here.  Yes, quantities are falling, but that is exactly what we would expect using the supply and demand model in this case.

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