Home > Economics > In Venezuela, you get money off the Capitalist Price.

In Venezuela, you get money off the Capitalist Price.

Greg Mankiw:

From my inbox:

Dear Professor,

I´m from Venezuela. And this picture shows the kind of things you find when you go to a Mercado Bicentenario in Venezuela (which is the new name of a chain of private markets -Cada and Exito- recently expropiated and now runned by the Government).

This one is from Mercado Bicentenario, in Centro Comercial Ciudad Tamanaco (CCCT), a mall, in Caracas, Venezuela.

It says:

Description of the product: Diana Oil.

Fair Price: 4,73 Bfs.

Capitalist Price: 7 Bfs.

% of savings: 32%.

My best regards, and congratulations for your blog, books and everything!

Personally, all I want to know is how they determined the “Capitalist Price”. As we know, in the capitalist system, prices are determined by supply and demand and I doubt there is a functioning market system in Venezuela. Except if they are using the prices that prevailed before the government expropriation.

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