What is hoarding?

Hoarding refers to a monopolistic practice that can be carried out in the mercado and that consists of making the price of a product more expensive by freezing its supply. In this way, the products can be sold at a price higher than the price that would be sold if the offer were not frozen.

Obviously, for this to work well and there are no problems, there needs to be a detailed study of the demand and their behavior. In other words, a demand forecast study would have to be done and know how much one would have at one price as well as another.

Should the forecasts fail, the only thing left for the company or agent that proposed this idea is to incur lawsuits that would approach their product as if it had not been hoarded.

On the other hand, care must be taken with these practices since they can be understood as purely monopolistic in many cases due to the large volumes of sales that are produced. This represents a danger since in some countries (Spain, for example), at first it is illegal to practice the monopoly.

For a product to obtain benefits, it is necessary that the quantity demanded decreases less than proportionally to the price increases. If this does not happen, no profit will be made, and therefore hoarding is useless. In addition, it is required that the supply does not increase vertiginously with the passage of time when prices are increased, nor that there are close substitutes.

To be able to practice hoarding, it is necessary that it is not carried out in open or large markets (but rather small ones) since, otherwise, the number of bidders and the number of communications would prevent such practice from being carried out.

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