The price is right
Are electronic price tags a curse or a boon?
Walmart, the largest American retailer, is set to introduce digital shelf price labels in 2300 stores, a move which has been causing some unrest. This technology can improve operational efficiency by replacing tedious, manual interventions to update shelf prices with a single mouse click, and in the process reduce the likelihood of errors or omissions. But some see it as a precursor to “Uber-style” surge pricing, which closely tracks the demand, raising the price of a ride when demand peaks occur. Is it likely supermarkets would follow suit, perhaps updating prices as frequently as six times per minute? And are prices that reflect actual supply and demand a bad thing?
Prices speak
The price of a good (or service) carries critical information for both consumers and producers. When supply and demand are fully balanced, everything that is offered is taken up, and everyone who needs something has their need satisfied. In economic language: the resources are allocated the most efficiently. The remarkable economic device that brings this optimum about is the price. In a free market, the price will tend to settle at a level where this equilibrium is reached. If, for some reason, the supply exceeds the demand, suppliers will compete to get rid of their excess inventory (or utilize their…
