Could someone please help with this question In the textbook, the ‘In the news’

Question

Could someone please help with this question

In the textbook, the ‘In the news’ article (Chapter 4, section 4.5) about price gouging explains why price gouging is unpopular with politicians and people affected by natural disasters. “When a disaster such as a hurricane strikes a region, many goods experience an increase in demand or a decrease in supply, putting upward pressure on prices. Policymakers often object to these price hikes, but this opinion piece endorses the market’s natural response.”
Please state your opinion regarding this pricing practice supported by economic principles from this chapter. Also, is "price gouging" an economic concept? What might cause these swings in prices?

Explanation / Answer

I support price gouging. The reason is due to lower supply and/or greater demand after natural disaster market can be in equilibrium only at higher price. At lower price which was prevailing earlier supply is less than demand. Yes it is an economic concept. Swings in prices may be causing by anticipated or actuals rise or fall in availability of goods. Similarly it may caused by actual or anticipated rise or fall in demand for good etc.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.