Price Gouging In The United States

Price fixing is illegal under the competition act of 1998. When participants on the same side of the market (such as the big 4 in the UK supermarket sector) agree to sell a service, product or commodity at a fixed price it’s the consumers who must pay while retailers and suppliers reap the benefits. There are extremely heavy penalties for price fixing in the UK You can be fined, disqualified from being a director - or even sent to prison (Business Link No Date).

Kohl’s pricing strategy has been the subject of illegal and ethical quandaries. Many opponents state that Kohl’s provides inflated deceptive reference prices. In 2013 a San Francisco appeals court permitted a lawsuit stating that the retailer falsely advertised sales pricing. (Los Angeles Times, 2013) Kohl’s appealed, only to lose as California courts permitted the lawsuits over the alleged false markdowns. While highly controversial other retailers have adopted a very resembling pricing model. In 2013 JCPenny implanted the Kohl’s sales strategies in its stores in an effort to revamp its struggling sales numbers. (Time 2013)

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.

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

Imagen the price of something such as a case of water that normally sells for $10-$12. Now imgen that same package of water selling for $99. Hard to believe? It’s a real thing that happens to people in the world. This real world thing is called price gouging and it happens more times than you would think. Price gouging happens in times of need when people run out of supplies such as food, water and other needs price gougers buy items for low prices then resell them for much more than what there worth. They pretty much steal from the people they sell items to by giving them an unfair price. Around 37 states have already put laws against price gouging bit there are still 13 states that don’t have laws to counter it. In some cases price

When a hurricane hits a location, many con artists take advantage since there’s desperate need for money at the moment. To those who financially wealthy, they’ll use that opportunity to become wealthier. There are a few ways con artists may scam a innocent person, one of which is by price gouging. Price gouging, at first, will be noticeable when one travels from gas station to gas station. A con artist may, for example, raise gas prices above the national average in attempt to obtain a profit in a large profit in the long run. In the case of Hurricane Sandy in 2012, price gouging was not tolerated. As a matter of fact, price gouging, where Hurricane Sandy hit the hardest in New York, will not tolerate an excessive increase in not just

These platforms have experienced a backlash recently for what is called surge pricing. When demand is higher, prices go up. "Surge pricing" occurs when a company raises the price of its offering if there is an increase in demand.

When the prices for stuff are increasing and expensive, the government likes to try to make things better. This is actually, something that is actually occurring in big cities, especially when it comes to rents. When there is more demand, people like to increase the prices in order to achieve having more revenue. this as well increases the prices of supplies because of the demand.

* First-degree price discrimination – different prices are charged based on what the buyer is willing to pay

Price discrimination is common term used throughout the economics realm. In a perfect economic world, one price would fit all, however, we are not nor will we ever be in a perfect economical balance. Price discrimination takes on many different titles but can be defined by one simple statement of selling the same product to separate individuals for a different price (Elegido 633). Many consumers may identify this as being an unlawful act of discrimination, however, in the economical sense it is a lawful way of increasing its economical outcome. By utilizing price discrimination, firms are able to identify groups of individuals who are willing to pay more for a product and be able to charge less for other groups to attract a more profitable outcome while also increasing its client base (Edwards 298). Often, firms shy away from this type of tactic due to the negative perceptions it may give them, yet find other ways within the market to offer discounts under a different title only to camouflage the discrimination with a fancier term (Elegido 634). Whether a firm chooses to utilize price discrimination or not or whether one feels it is a legal way to charge more for a product, it has been proven to be a useful tool in both maximizing profits and attracting a client base both legally and ethically.

Predatory pricing is an anticompetitive strategy that indents to drive competitors out of the market and gain monopolistic profits. The predatory firm first lowers its price, to an extent which the revenue of the product does not cover the costs. Their competitors must then lower their prices below their average cost, thereby losing money as their products are sold. If they do not cut their prices, they will lose customers due to higher prices; if they do cut their prices, they will eventually go bankrupt. (DiLorenzo, 1992)

There are many reasons for which a price war may occur, in all cases the reason for starting the price war is different but the reason for its continuation is not to lose sales. They are when a firm attempts to maximise capacity, for survival purposes, in oligopoly markets, where there are

Although there are other types of pricing such as skimming pricing where the business will set an initial high price but slowly lower it so that they can gain more types of customers from a wider market.

Pricing is the value placed on good or service by sales force to some point in time .A price placed in the market will be higher or lower than the value perceived by potential sale force does not really contain the customer‘s orientation necessary to market the product or service .Pricing is major factor that keeps the economy activity. The employment of any or all the factor of production i.e. land labor and capital are dependent upon the price received by each (Stin, 1998).

Many external factors play a role in the pricing of products, with some of them being, “the market and demand, competition, and other environmental elements” (Kotler, Bowen, Makens, & Baloglu, 2016, p. 297). Market and demand influences the price in the sense that the company must know the market’s demand of their certain product to know the highest price they will be able to charge. The next area the company must be well equipped in is cross-selling and upselling. If the sales people are unable to sell their own products, then the company needs to either reevaluate their employee’s sales skills, or the product itself. Next, the customer must be able to see the value of their dollar. If they see that spending $100 on a room for a night gets them an unforgettable stay in the city of their choosing, then they will be more likely to spend the $100. The marketers must know, “why they buy, and how they make their buying decisions,” in order to price their products accurately (Kotler,