Is it Evil to Exercise Price Gouging?

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Is it Evil to Exercise Price Gouging?

Price Gouging代写 Is it Evil to Exercise Price Gouging? People hold a divergent opinion regarding the price gouging while questioning its legality.

 

Introduction

Ceteris paribus, in other words, holding other factors constant, in an economic sense, the law of demand and supply prevail after the occurrence of a natural disaster. People hold a divergent opinion regarding the price gouging while questioning its legality. Some states have enacted the law to restrict any likely price gouging at the time of natural disaster. In this regard, the key question has remained as to whether it is evil to exercise price gouging.

Description of the Video  Price Gouging代写

The video “Strossel in the Classroom” examine the issue of price gouging by taking opinion from different people. The video focuses on the natural disaster that hit America in the recent past. It questions how some business people take advantage of the desperate situationto sell at unreasonable prices. People are divided on the opinions regarding price gouging. Some people see it as evil to sell at exorbitant prices to rip off from desperate people while others see the need to have such respond to shortage as necessary.

Price Gouging is Not Evil  Price Gouging代写

It can simply be argued that price gouging is controlled by the forces of demand and supply in a free market. As such, price gouging a free market regulating itself (Lee, 2015). In microeconomic terms, any disruption of the market equilibrium, the forces of demand and supply act to restore the equilibrium condition. When a natural disaster occurs, the supply condition changes. The goods that people want in large quantity become scarce hence raise the level of market demand (Cavallo, Cavallo, & Rigobon, 2014). At that state, the market equilibrium needs to be restored. In so doing, to increase supply prices increase.

Price Gouging代写
Price Gouging代写

Increase in prices also lowers people from scrambling for scarce products or services. Therefore, in economic terms, price gouging is not evil. For instance, when hurricanes struck Mississippi, water pipes, gas stations, food stores, and power lines were destroyed. The incident created a state of high demand for water, power, gasoline, and foods. High demand makes sellers to increase prices which consequently increase the supply.

Moreover, as a result of price gouging, people become willing to supply the affected people with the necessary services and products. Hence, it is a positive response to salvage the situation. Although they do it for profit, price levels notwithstanding, it is also necessary to the affected people.

Price Gouging is Evil  Price Gouging代写

Perhaps the strongest argument against price gouging is it is an exploitation of desperate customers. Price gouging is based on a greedy economy that businesses will always try to make more money. Without consumer protection in the economy, businesses will rip off from customers as long as they are selling (Bellemare, 2015). The practice is evil in the perspective that business people are taking advantage of a desperate situation instead of taking part in salvaging the condition and save people from hunger, thirst, traps, and darkness. Instead, they can charge reasonable prices without the need for high sale turnover.

Besides, price gouging is morally wrong as it impairs the equitable access of services and products by the needy customers. Some customers cannot afford services and products hence locking out potential buyers (Moriarty, 2016). It inflicts suffering on those who cannot afford services and products being offered. Therefore, price gouging is a reflection of the lack of respect and care to the victims and lowering human dignity.

Price Gouging代写
Price Gouging代写

In the economic terms, price gouging is influenced artificially rather than economically. It is economically unreasonable to charge a profit margin that is more than 30 percent of the cost of production or buying price (Dorfman, 2016). As such, price gouging is ethically wrong and should be made illegal.

References  Price Gouging代写

Bellemare, M. F. (2015). Rising food prices, food price volatility, and social unrest. American Journal of agricultural economics, 97(1), 1-21.

Cavallo, A., Cavallo, E., & Rigobon, R. (2014). Prices and supply disruptions during natural disasters. Review of Income and Wealth, 60, S449-S471.

Dorfman, (2016). Price gouging laws are good politics but bad economics. Retrieved from https://www.forbes.com/sites/jeffreydorfman/2016/09/23/price-gouging-laws-are-good-politics-but-bad-economics/#4eab844f64d3

Lee, D. R. (2015). Making the Case against” Price Gouging” Laws: A Challenge and an Opportunity. The Independent Review, 19(4), 583-598.

Moriarty, J. (2016). Business ethics.

Price Gouging代写
Price Gouging代写

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