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This week’s discussion topic is about Price Gouging. Price gouging occurs only under a narrow set of legally defined circumstances. Price gouging is a legal concept, not an economic concept.
When a natural disaster occurs and the governor of the state declares a state of emergency then the price gouging law of that state will go into effect, but only if the state has such a law.
The economic effect of price gouging laws is to put a Price Ceiling on all goods and services covered by the state’s price gouging law. Price ceilings always cause shortages.
Assignment Summary:
- Read “Florida Lawsuits Allege Price Gouging,” http://www.cnn.com/2004/LAW/08/17/charley.gouging.charges/index.html and “They Clapped: Can Price-Gouging Laws Prohibit Scarcity?” https://www.econlib.org/library/Columns/y2007/Mungergouging.html
- Read the article from Chapter 4 in your textbook: “In the News: Price Increases after Disasters” (pages 80-81).
- Also read the article -The Problem with Price Gouging Laws The Problem with Price Gouging Laws – Alternative Formats .
- Watch the Price Gouging videos above.
- Summarize the main points of each article and decide which graph (A, B, C, or D) can be used to explain each event and why – be specific. More than one graph may apply. ( SupplyAndDemandGraphs2.doc) Supply and Demand Guide – Alternative FormatsandSupply and Demand Graphs.pptx Supply and Demand Powerpoints – Alternative Formats )
- What is your conclusion? Is price gouging a good thing or not? Or is it just necessary? Explain why.
- Post your views to the discussion board and refer to at least two different concepts from this week’s Chapters. Your illustration of concepts MUST include an explanation why you think they are relevant to the week’s topic using specific information from the articles, videos and other research that you have done
MAKE SURE THAT YOU ADD SOMETHING NEW to the discussion.
250 words. Keep them short, specific, and clear.
Use paragraphs as appropriate.
Remember to document all use of sources by using citations and references.
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