How does the choice between price controls (rationing/shortages) vs market clearing (higher prices) play out over time? This models reserve depletion and fuel access under different policy mixes.
The trade-off: Rationing keeps prices low but creates physical shortages — some people get no fuel. Market clearing eliminates shortages but prices spike. Rationing also drains reserves faster because consumption isn't reduced by price signals. When reserves run out, both policies converge to the worst case.