Post-Sandy Price Gouging: Economically Sound, Ethically Dubious
A Review of the Article
Kalina Walters
Montana State University Billings
Post-Sandy Price Gouging: Economically Sound, Ethically Dubious
Price Gouging Concept A concern for many consumers who have been involved in a natural disaster is how to get supplies at a reasonable price before they are gone. When natural events occur it leaves people in need of the very basic commodities like gasoline, groceries, and utilities. Stores and suppliers do not have time to prepare for disasters like these and are limited to the supplies they have on hand. In these cases, further shipments will most likely be delayed. Some shop owners and suppliers feel they should increase prices because …show more content…
His article makes his opinion known and that is that price gouging after a natural disaster is “treasonous,” (Furtelle, 2012). He gives examples of past events of gouging and how government officials have to remind people of the laws. He points out that some economics and libertarians alike feel that by letting the businesses raise prices in these events the invisible hand of the free market will essentially reach equilibrium within the supply and demand. Meaning if it costs more to purchase the product in need consumers will buy less and more people will be able to make the same purchase. On the same note, this will also help to alleviate long lines waiting to make a purchase because businesses would have the added incentive of a bigger profit and may it would benefit them to transport more product to the area affected, sooner rather than later. Futrelle summed up his article, with an example of a recent shut down of the railways in New York City. Uber, a transportation company, set up what they called, “surge pricing” to help get more vehicles on the streets, but they also doubled the normal rates (Futrelle, 2012). In conclusion to the article Uber was not seen in the best of light and had to discontinue the higher prices for transportation after one day. This event showed that people in New York City would rather remain in line for certain products than pay more profits to
A Review of the Article
Kalina Walters
Montana State University Billings
Post-Sandy Price Gouging: Economically Sound, Ethically Dubious
Price Gouging Concept A concern for many consumers who have been involved in a natural disaster is how to get supplies at a reasonable price before they are gone. When natural events occur it leaves people in need of the very basic commodities like gasoline, groceries, and utilities. Stores and suppliers do not have time to prepare for disasters like these and are limited to the supplies they have on hand. In these cases, further shipments will most likely be delayed. Some shop owners and suppliers feel they should increase prices because …show more content…
His article makes his opinion known and that is that price gouging after a natural disaster is “treasonous,” (Furtelle, 2012). He gives examples of past events of gouging and how government officials have to remind people of the laws. He points out that some economics and libertarians alike feel that by letting the businesses raise prices in these events the invisible hand of the free market will essentially reach equilibrium within the supply and demand. Meaning if it costs more to purchase the product in need consumers will buy less and more people will be able to make the same purchase. On the same note, this will also help to alleviate long lines waiting to make a purchase because businesses would have the added incentive of a bigger profit and may it would benefit them to transport more product to the area affected, sooner rather than later. Futrelle summed up his article, with an example of a recent shut down of the railways in New York City. Uber, a transportation company, set up what they called, “surge pricing” to help get more vehicles on the streets, but they also doubled the normal rates (Futrelle, 2012). In conclusion to the article Uber was not seen in the best of light and had to discontinue the higher prices for transportation after one day. This event showed that people in New York City would rather remain in line for certain products than pay more profits to