Microeconomic Topic Article Review: Price Gouging

demand for a good is high and the supply is low, the price increases. At some point people’s

Michael J. Sandel starts the book “Justice: What’s the Right Thing to Do?” by presenting case studies that discusses the different concepts of justice. He talks about Hurricane Charley that left Florida devastated. This caused businesses to increase prices for commodities and services by over double what is use to be, which is known as “price gouging.” This definitely left many people angered and trying to seek action against these businesses since of the price-gouging law in Florida. “Price-gouging laws revolve around three ideas: maximizing welfare, respecting freedom, and promoting virtue” (Sandel, 10). Since welfare and freedom are claims that makes up the unfettered market. The market endorses welfare and believes in providing incentives

In conclusion, price gouging loosely defined as charging a price that is higher than normal or fair due to natural disaster or crisis. Typically, immoral and illegal in many jurisdictions. But the results are generally considered to be an efficient market

Hurricane Harvey hit Texas, the citizens of Texas required a lot of help in terms of utilities, food and water. Some citizens homes where flooded, while others were waiting for the inevitable. During these hard times price gouging was a big problem. Things being over priced causing residents to struggle to get supplies for survival. The businesses should be penalised for the price gouging and increase the charges and penalty prices against it for the future because it is against the law, cheating the citizens out of their savings and it is unethical.

‘Why popcorn costs so much at the movies; and other pricing puzzles’ 1by Richard B. McKenzie2 explains the economics behind the pricing in the markets we are around everyday and the public help to generate by helping the circular flow of income. McKenzie applies logic and analyses the data he finds although there are some major flaws in his book that he does not explore on which means it gives the book weakness. McKenzie does not confine himself to general ideas of inflated prices or average market prices, he even uses reasoning about prices to show that the federal government’s rules for getting on airplanes have caused more

In a free market economy, price fixing agreements face two large challenges to their effectiveness. The first is that while the companies participating in a price fixing agreement will benefit as a whole from adhering to the agreement, each individual company has a very strong incentive to cheat on the agreement and charge a market rate. Lowering prices allows the company to pick up additional market share from their competitors and increase profits for themselves above what they would be entitled to under the agreement. The second difficulty arises from the fact that without very high barriers to market entry, the higher prices being charged

In my personal opinion, anti-gouging laws seem like a very noble idea, however, that does not make them effective. The economy is a very delicate balance of supply and demand but the anti-gouging laws are only supporting the consumers or those that are in demand. Therefore, I am arguing that California should avoid anti-gouging price ceilings for many reasons. First, according to Science Daily, “California has more than 99% chance of a big earthquake within the next 30 years”. This is public information and I would argue that those who move to California are aware of the risks-or at least should be aware. With this in mind, rather than promoting anti-gouging laws, the government should encourage the residents of California to put money aside

Odd-even pricing – Using numbers to trick and fuck people into thinking goods are cheaper

In the article, Useem notes that “The price of a can of soda in a vending machine can now vary with the temperature outside” (64). By utilizing aggrandizement, he avails the readers understand the way price discrimination would look if it was applied in a live shopping scenario, making it simpler to understand his conceptions. In additament, he withal states that “the practice of setting a fine-tuned price for a good or an accommodation-which took hold in the 1860s” (64). By utilizing an allusion with the current times and the 1860s it engenders thought to occur in the reader’s mind causing them to optically discern how the price system has transmuted. Furthermore, Useem had a very negative posture towards the online shopping system topic since he was very critical and astringent with many of the things he verbalized about. Useem verbalized “the initial consumer experience of online shopping-so simple! and such deals!-was losing some of its sheen.” (66). Useem verbalizes about this in a dismissive and mordacious manner which leads the reader to believe that his views on this are negative and

During the 16th century, the entire Europe suffered in the hyperinflation, created the price of all goods increased to the outrageous levels. The inflation problem was lasted for over a century. Because of the lengthy period of inflation, historians named the problem, the Price Revolution, affected to people?s lives, alter the Europeans expansion, weaken government, and disruptive society significantly.

The price ceiling is the maximum price a seller is allowed to charge for a product or service. An impact on society includes when the prices are so high of a product, that no one can buy it. A price floor is the lowest legal price a product or service can be sold at. When market price is at its lowest, it may still be too high for consumers to purchase products. Governments can intervene for any purpose, and they are the ones who set these price controls.

Cascio, W. F. (2006). Decency means more than "always low prices": A comparison of co

1. Economics – the efficient allocation of the scarce means of production toward the satisfaction of human needs and wants.

Quite often, consumers purchase goods and services based on their perceived need. Upon making the decision that a need is present and a solution is available consumers are more equipped to react to that need. Although previously perceived that consumers will normally accept prices as presented by suppliers that remains to not be the case. Consumers assess and process prices based on past purchases and other psychological process they went through previously such as persuasive marketing strategies, accessibility of the goods or services and possibly information gathered from prior purchasers of a product. There are countless options that are available to consumers. Consumers are then faced with the choice of choosing the product that best fulfills their need at that given point. Consumers who are knowledgeable regarding prices will be aware of the approximated price for products (Zhao, Zhao & Deng, 2015).

This chapter sets out the rationale for price discrimination and discusses the two major forms of price discrimination. It then considers the welfare effects and antitrust implications of price discrimination.