Sunday, November 25, 2012

Is Price Gouging Wrong?

In the aftermath of Hurricane Sandy there was a lot of talk about price gouging. Governor Christie of New Jersey warned businesses not to engage in price gouging and promised to prosecute any business that did. But is price gouging wrong? Is it immoral? Take a look at this video before jumping to any conclusions.

Price Gouging Video

Also, since gas stations were not allowed to "price gouge" in New Jersey, how was gas allocated? After all, if the price is not allowed to rise to meet demand some other mechanism of allocation must be used. So what happened? Time travel back to the 1970's.

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