Price Gouging
ANDREW ROSS SORKIN FOR THE NEW YORK TIMES
HTTPS://WWW.NYTIMES.COM/2017/09/11/BUSINESS/HURRICANE-PRICE-GOUGING.HTML?MCUBZ=1
Morgan Matthews | FA17: INTRO TO MICROECONOMICS: 18907 | November 17th, 2017
II. Article Summary
Hurricane Price Gouging Is Despicable, Right? Not to Some Economists, written by Andrew Ross Sorkin for The New York Times, debates on whether price gouging during times of disaster is a good thing. Although the idea of raising prices for items that people need the most during tragedies, such as food, water and shelter, seems heartless, it could result in marginal benefits not only for producers but for consumers as well. Some economists believe that not allowing price gouging, by enacting …show more content…
Consumers expectations about the future will affect the current demand for a product. If there is warning of any natural disasters, such as hurricanes or tornados, demand for batteries, milk, and canned food will rise. Or if consumers suspect that a price will rise soon, the current demand will increase because consumers want to buy more of a product while the price is still cheaper. This is also seen in places that are known for having rough weather, involving hurricanes, tornados, etc., demand for those same products are higher than in areas that rarely have …show more content…
Conclusion
While price gouging is visibly cruel to consumers, particularly during disasters and in times of need, it is also clear that it is efficent in a market. I always thought that in times of need, prices would drop in order to help consumers, especially those who are unable to pay for goods. However, now that I have taken microeconomics I know that there are trade-offs, gains and losses, for everything. Nothing is free. If a person or consumer gains something for free, then it had to come out of the pockets of someone else, whether it be from another consumer or a supplier.
Profit is the reason why prices rise in times of need instead of falling. Everyone wants a chance to earn profit. Suppliers see a chance to raise their prices when demand increases and they do raise their prices because if they do not, they could risk consumers buying large quantites of the product at a cheap price and selling it themselves to make a profit. That is also considered a form of the black market, and it results in a loss to the supplier but a gain to the consumer who is now considered to be a
ANDREW ROSS SORKIN FOR THE NEW YORK TIMES
HTTPS://WWW.NYTIMES.COM/2017/09/11/BUSINESS/HURRICANE-PRICE-GOUGING.HTML?MCUBZ=1
Morgan Matthews | FA17: INTRO TO MICROECONOMICS: 18907 | November 17th, 2017
II. Article Summary
Hurricane Price Gouging Is Despicable, Right? Not to Some Economists, written by Andrew Ross Sorkin for The New York Times, debates on whether price gouging during times of disaster is a good thing. Although the idea of raising prices for items that people need the most during tragedies, such as food, water and shelter, seems heartless, it could result in marginal benefits not only for producers but for consumers as well. Some economists believe that not allowing price gouging, by enacting …show more content…
Consumers expectations about the future will affect the current demand for a product. If there is warning of any natural disasters, such as hurricanes or tornados, demand for batteries, milk, and canned food will rise. Or if consumers suspect that a price will rise soon, the current demand will increase because consumers want to buy more of a product while the price is still cheaper. This is also seen in places that are known for having rough weather, involving hurricanes, tornados, etc., demand for those same products are higher than in areas that rarely have …show more content…
Conclusion
While price gouging is visibly cruel to consumers, particularly during disasters and in times of need, it is also clear that it is efficent in a market. I always thought that in times of need, prices would drop in order to help consumers, especially those who are unable to pay for goods. However, now that I have taken microeconomics I know that there are trade-offs, gains and losses, for everything. Nothing is free. If a person or consumer gains something for free, then it had to come out of the pockets of someone else, whether it be from another consumer or a supplier.
Profit is the reason why prices rise in times of need instead of falling. Everyone wants a chance to earn profit. Suppliers see a chance to raise their prices when demand increases and they do raise their prices because if they do not, they could risk consumers buying large quantites of the product at a cheap price and selling it themselves to make a profit. That is also considered a form of the black market, and it results in a loss to the supplier but a gain to the consumer who is now considered to be a