Exampls of Price Mechanism in China

In latest years in China, a nationwide famous tea called Xihu Longjing Tea is allocated to buyers using the price mechanism. This good-natured of tea is produced only in one place, Xihu, or West Lake, in Zhejiang Province in China, and is rattling dependent on weather. If in one year there is frost in spring in which Longjing Tea is harvest and produced, the quantity of production will plummet seriously. This shifts the supply curve to the left in a large scale, which makes the price high-rocket to the new equilibrium point by moving along the rent curve. Then in this year Longjing Tea will become a kind of luxurious drink.Only deep people are able and have the willingness to purchase, who regard this as a way to show hit their wealth. I believe the society should use the price mechanism to determine for whom this good is produced because as rareness, luxury, as well as consumption for enjoyment, the change of the price will not make big core on the living situation of the mi ddle class and disadvantaged consumers. Price mechanism in the merchandise of Longjing Tea has no impact on social equity but improve efficiency of allocation. similarly in China, vegs and midpoint are products that are not allocated by the price mechanism.Instead the price is stipulated by the government. Although vegetable production and transportation, like Longjing Tea mentioned above, are affected by seasonal climate, the Chinese government makes its case to stabilize the price. I believe that the society should not use price mechanism to allocate vegetables and meat because they are daily necessities, which are produced for all people, the riches, the middle classes, as well as the poors. I think government should spend some of their revenue to stabilize the increasing price in order to take up equity and the stability of the society.