The “price gouging” myth is one of the most pervasive pieces of economic nonsense that I’ve heard. Little wonder that the Stalinist media pushes this class warfare propaganda it every chance it gets.
Likely inundated with complaints by economically ignorant consumers, politicians react to this “threat” of sudden rising prices totally unaware of (or insensitive toward) the damage they’re actually creating.
“If sellers don’t raise prices, supplies vanish. Anxious buyers line up and often buy more than they need, just in case. Those not at the front of the line may get nothing. [...] [Y]ou allow people to raise prices — even to “gouge” — because only people who REALLY need them will cough up the money. Gouging also encourages greedy entrepreneurs to rush in with much-needed goods, or to look for more supplies.”
Ironically the same news station promoting price gouging as fact is the same news station that debunked it in May of 2006. Nice job!
Gas Price Gouging Hits Hurricane States — Officials Are Instituting Emergency Anti-Price Gouging Laws in Their States by CHARLES HERMAN, ZUNAIRA ZAKI and SCOTT MAYEROWITZ
More on the myth of price gouging below:
Walter E. Williams Explains “Price Gouging” Myth
Say you owned a small 10-pound inventory of coffee that you purchased for $3 a pound. Each week you’d sell me a pound for $3.25. Suppose a freeze in Brazil destroyed half of its coffee crop, causing the world price of coffee to immediately rise to $5 a pound. You still have coffee that you purchased before the jump in prices. When I stop by to buy another pound of coffee from you, how much will you charge me? I’m betting that you’re going to charge me at least $5 a pound. Why? Because that’s today’s cost to replace your inventory.
Historical costs do not determine prices; what economists call opportunity costs do. Of course, you’d have every right not to be a “price-gouger” and continue to charge me $3.25 a pound. I’d buy your entire inventory and sell it at today’s price of $5 a pound and make a killing.
The Myth of “Price Gouging” by Alex Epstein
Price gouging is myth; market determines what price is fair Matt Hittle
Filed under: The Myth of Price Gouging, What Liberal Media? , economic myths, gas, gas prices, Hurricane, Ike, Oil, oil prices, petrol, price gouging, prices, What Liberal Media?
