FIL 251 Q4
Arguments in support of and against price gouging.
Erika de Wet
14095302
Tutor: Shaun Nortje
Group 6, HB 1-7
Wednesday 9:30
29 September 2015 Arguments in support of and against price gouging.
The arguments for and against price-gouging laws renders around 3 ideas, namely:
Maximising welfare
Respecting Freedom
Promoting virtue
In this report i will discuss a standard argument in support of and against price gouging.
Arguments in support of price gouging.
Markets promote the welfare of society
A free market creates an incentive for suppliers to work hard to supply products in a volume that demands are met. In such instances suppliers from far distances might also find it worth-it to supply goods and services in critical areas. The sudden price increase for the drug, called Daraprim, was due to rare usage. As demand dropped, the price had to increase to meet the return-on-investment (ROI) …show more content…
welfare
The suffering of patients who cant afford to pay the increased prices weighs a lot more than the bigger supply of goods that are due to higher demand. As a Utilitarian, one would want to maximise the welfare of a society, helping the majority in a situation. If the price of pharmaceuticals are increased so drastically, the majority of patients and a big part of society would not be able to get necessary medical treatments in return for only one company to get a higher ROI.
Freedom
As Attorney General Christ stated: “In an emergency, buyers under duress have no freedom.” (Sandel 2007). Under certain conditions a free market is not free. Seeking critical medical attention is not a free action and raising prices is extortion in that context.
The sick patients now have no other choice but to the pay the increased price since generic versions are very limited (it is very difficult for generic companies to get samples for necessary testing since Daraprim’s distribution is very tightly controlled) and may not be as
Arguments in support of and against price gouging.
Erika de Wet
14095302
Tutor: Shaun Nortje
Group 6, HB 1-7
Wednesday 9:30
29 September 2015 Arguments in support of and against price gouging.
The arguments for and against price-gouging laws renders around 3 ideas, namely:
Maximising welfare
Respecting Freedom
Promoting virtue
In this report i will discuss a standard argument in support of and against price gouging.
Arguments in support of price gouging.
Markets promote the welfare of society
A free market creates an incentive for suppliers to work hard to supply products in a volume that demands are met. In such instances suppliers from far distances might also find it worth-it to supply goods and services in critical areas. The sudden price increase for the drug, called Daraprim, was due to rare usage. As demand dropped, the price had to increase to meet the return-on-investment (ROI) …show more content…
welfare
The suffering of patients who cant afford to pay the increased prices weighs a lot more than the bigger supply of goods that are due to higher demand. As a Utilitarian, one would want to maximise the welfare of a society, helping the majority in a situation. If the price of pharmaceuticals are increased so drastically, the majority of patients and a big part of society would not be able to get necessary medical treatments in return for only one company to get a higher ROI.
Freedom
As Attorney General Christ stated: “In an emergency, buyers under duress have no freedom.” (Sandel 2007). Under certain conditions a free market is not free. Seeking critical medical attention is not a free action and raising prices is extortion in that context.
The sick patients now have no other choice but to the pay the increased price since generic versions are very limited (it is very difficult for generic companies to get samples for necessary testing since Daraprim’s distribution is very tightly controlled) and may not be as