“Price gouging” is a derogatory term for “unfair” prices on goods, typically in an emergency.The problem is that the perception of “unfairness” is totally arbitrary and stems from an ignorance of basic economics.Rather than create “fair” outcomes, “price gouging” regulations create the very problems they are supposed to solve.
What are prices?
A price is the value demanded by a seller in exchange for a good.The money paid for goods makes production of more goods possible.When the demand for a good suddenly goes up or the supply goes down, sellers raise prices to avoid a shortage.Higher prices cause consumers to limit their consumption.Higher profits pay for money to be invested in expanding production, and encourage other producers to redirect production from other uses to the goods most urgently demanded.
The disastrous effects of price controls during disasters
Consider what happens when politicians attempt to control a run on gas precipitated by an imminent hurricane:
When price controls are imposed, the market’s ability to respond to an emergency is paralyzed Rather than distributing gas to those who value it the most, products are distributed to those who buy it first. This encourages those with time to wait in endless lines, or the most panicky individuals to rush to fill up their cars at the first sign of trouble. Runs begun whenever a minority of people expects a rapid increases in demand, and the entire stock is quickly consumed by a few.
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22 comments:
You have too much time on your hands - charging an enormous amount of money above the normal price is gauging - you can justify anything - it's still called gauging.
Free Market Capitalism
Person who can afford it calls it Free Market Capitalism
Person who can’t calls it Price Gouging
9:27AM.....Exactly right. Small case as an example: Locally when open, buying French fries at Thrashers, in Ocean City, Md. usually cost about twice what they could be bought for at another venue. This is not meant to demean Thrashers by any stretch of the imagination but simply demonstrates the impact made by location and demand. Is this price gouging? Of course not. No more so than anything that is being sold to willing buyers based on demand, access, availability and location.
It's price gouging........plain and simple........like what Pecan Square Deli was doing.
70,000 for a pickup truck is price gouging.
1122
If the company doesn't sell a single one of those trucks, what do you think will happen? They lower the price. But if fools keep spending money on these (and new $1,000 iPhones) the company continues to go up. supply and demand.
Gas Gouging is the Worst one !!! Supply & Demand has always been their
Excuse !! So, What about now, When Supply is More than Demand ??
It should be 50 cents a gallon Right Now !!!!
"Those that ignore history are doomed to repeat it." Nixon initiated prices controls for gas during the oil embargo in the seventies. What did it get? Long lines, waiting for hours to get to a pump, only to find it was sold out, odd / even days to buy gas, fights at the pumps. Yeah the price was "controlled" if you could find any gas to buy. And no one conserved or curbed their use of gas. Allowing the cost of gas to rise to meet the demand would have kept gas available to all, all those willing to pay for it, and others would have conserved and done without until the price came back down (market forces). Those who advocate price controls to combat price "gouging" have no understanding of basic economics, and are socialists. Yes socialists. Socialism is all about price controls, and they don't need an economic crisis to find that they can't find toilet paper and all the other necessities in their stores. Their shelves are empty, and they can't buy the things they need at any price.
March 31, 2020 at 1:15 PM:
Just to let everybody else that you don't know what you're talking about, 50 cents is less than the wholesale price in the commodity market today. Gas typically sells for about 70 cents above wholesale to cover transportation costs to get it to the pumps, and for markup for normal profit. It should be approximately $1.20 per gallon under normal market forces. The price is about to rapidly drop as a result of oversupply. It has already been recorded at the wholesale level, and will soon be noticed at the pump. 50 cent per gallon is ludicrous. That is not going to happen, but not for the reason you think. Some gas vendors in the area have already been selling gas at $1.49 / GAL.Stay tuned (and educate yourself to basic economics).
I have a 12 gauge shotgun
Gasoline is a MONOPOLY business.
They don’t compete with each other.
Syndicate. Organized Crime.
Get it?
Monopoly Capitalism
Same as Communism.
The Rabbis checkmated is a long time ago
March 31, 2020 at 2:42 PM:
A Monopoly is ONE business supplying the entire market with a commodity. Get it? Look up the definition. Multiple suppliers can be accused of collusion, or price fixing, but not of being a monopoly. The refiners have been accused of price fixing many times, but they go to great pains to abide by the law, and they have not been fined for any collusion in prices. The supply market (and price) is determined by demand, whether you understand how it works, or not.
March 31, 2020 at 2:41 PM:
I see what you did there, however it was probably lost on the one you commented to.
March 31, 2020 at 11:22 AM:
Not if you are willing to pay it.
March 31, 2020 at 10:47 AM:
Don't shop there. See how easy it is to not get "gouged?" Nobody is forcing you to buy anything from them that you can't find anywhere else.
March 31, 2020 at 2:43 PM;
You been drinking, or smoking the wacky weed? You make no sense at all.
Sorry, this is a poor argument as is claiming to provide a service. Shopping somewhere else is not always an option and that is why it is illegal to do so when a state of emergency is declared. Stick the free-market rhetoric right where the sun doesn't shine. Do so and you'll sit in jail and not a soul cares about how you may feel you are entitled to exploit the situation. Tell it to the judge.
The bottom line to all of this is.............DO NOT GO TO THE DELI AT PECAN SQUARE AFTER THEY REOPEN!!!!!!!!!!! Period! Simple!!
At 11:39 p.m., you should try reading the article. It's obvious that you did not
At 11:39 p.m., you are an idiot you're telling me that shopping Elsewhere for scrapple bread eggs butter hamburger is not an option. You're a joke.
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