When disaster strikes, is it OK for stores to raise prices? Lots of jurisdictions have laws that limit or even forbid such behaviour. TO most people, this makes obvious good sense, since it prevents merchants from behaving in a predatory way towards desperate consumers. The ethics of pricing is complicated, but consider this. Many people fail to see that raising prices can help ration goods, and many people believe that rationing itself is justified in the wake of a natural disaster. Consider: if gas prices get jacked up by 50%, then the guy who just wants gas for his SUV so that he can take his kayak out to the lake for the weekend might decide to stay home, leaving gas for the taxi driver whose livelihood depends upon it or for the single mother who needs gas to drive her kids to school. >>>
LINK: Nathan Deal signs order banning gas price gouging after pipeline spill (from a blog of the Atlantic Journal-Constitution)
[Georgia’s] Gov. Nathan Deal signed an executive order Monday preventing gas stations from significantly hiking fuel prices after a pipeline spill in Alabama led to long lines and dry pumps across north Georgia, echoing an existing state law that already bans price gouging.
Deal said news reports of “substantially” increased gas prices in some markets in his order led him to reiterate the law, which prohibits gas stations from gouging prices during a “state of emergency.” The law allows gas stations to only hike prices based on the increased cost of transporting fuel or the cost of the gas, not on the increased demand for the fuel….
What do you think?
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