Price Gouging

Price Gouging

“Price Gouging”
According to our Book Price Gouging means the price of something goes up, the price spike reflects the market process at work, and the increase in demand and decrease in supply lead to a higher price. That price reflects the greater relative scarcity of whatever item in question. I also looked it up online at http://economics.fundamentalfinance.com/ according to them there are two definitions for price gouging, one is pricing above the market when no alternative retailer is available and second, the phenomenon of sharply rising prices of items in often temporarily high demand. It also says that according to the second definition price gouging describes an economic occurrence. Some causes of Price Gouging are usually caused by the Consumers themselves, because of a cause of more demand of the supplied good makes it a more scarce good so they can go up on the price, Supply and Demand, and they know you will pay it. Really, price gouging is merely a reaction to supply and demand and rarely has anything to do with suppliers taking advantage of consumers, even though we all think that it is the suppliers fault and they are merely trying to take advantage of us the consumers, fact is that we the consumers usually generate the costs going up. An example would be if a Hurricane comes through and destroys Oil platforms out in the Ocean. This causes a decrease in the supply of Oil, which in return if a gas station bought their gas from them, then they would have only a limited supply for their customers so they would have to charge more for the gasoline to a point at which only a few consumers will be willing to pay for it. Therefore, price gouging does not exist. If a consumer is willing to pay a certain price, then he really is not being gouged because if he is not willing, then he can look for a substitute or do without. That is exactly what supply and demand are all about. The one’s being effected by Price Gouging are the Consumers as well as the...

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