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Price Gouging - Result of supply/demand or exploitive/unethical?
Posted on 4/1/26 at 10:26 am
Posted on 4/1/26 at 10:26 am
quote:
LINK
This term has been tested on TD before. My subjective assessment is that most posters see it as a function of supply/demand (of which I agree...with some extreme exceptions).
Given the oil market disruption by the Iran conflict and rising fuel prices that has negative personal economic impact,
1. What are your thoughts on "price gouging" -- function of supply/demand or exploitive/unethical?
2. Has your view changed as a result of this real-time experience?
quote:
Price gouging is a pejorative term for the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair by some. This commonly applies to price increases of basic necessities after natural disasters. Usually, this event occurs after a demand or supply shock. The term can also be used to refer to profits obtained by practices inconsistent with a competitive free market, or to windfall profits. In some jurisdictions of the United States during civil emergencies, price gouging is a specific crime. Price gouging is considered by some to be exploitative and unethical and by others to be a simple result of supply and demand.
7
Posted on 4/1/26 at 10:27 am to Everyday Is Saturday
please whine more.....
Its free market capitalism
Its free market capitalism
Posted on 4/1/26 at 10:28 am to LSUWoodworker
quote:
Its free market capitalism
The US isn't a free market so this is false.
Posted on 4/1/26 at 10:28 am to Everyday Is Saturday
Run out of the damnded thing. Then see what happens...
Posted on 4/1/26 at 10:32 am to Everyday Is Saturday
I remember during the 08 hurricane gas prices spiked and people were mad as hell calling it gouging.
Posted on 4/1/26 at 10:32 am to KosmoCramer
quote:
The US isn't a free market so this is false.
Agree, its mixed but price gouging is still a misnomer
Posted on 4/1/26 at 10:37 am to Everyday Is Saturday
Price gouging is a term used so loosly that it has lost its defination.
What is happening with gas right now isn't gouging. Their margins right now may be great but they are preparing for the potential of high gas costs for months. Where comsumers are going to be way more aware of the price and the cheapest per gallon price is going to be the gas station that does the most business.
What is happening with gas right now isn't gouging. Their margins right now may be great but they are preparing for the potential of high gas costs for months. Where comsumers are going to be way more aware of the price and the cheapest per gallon price is going to be the gas station that does the most business.
Posted on 4/1/26 at 10:38 am to Everyday Is Saturday
Perhaps laws against them should be done away with. However we have a lot of other things we need to worry about first.
Posted on 4/1/26 at 10:48 am to Everyday Is Saturday
Typically price increases so high/rapidly resulting in price gouging can really only be achieved at a local level, and true price gouging occurs more with elastic product where there is now no other alternative.
What’s happening right now in oil and gas is the result of supply/demand because oil/gas in an inelastic product.
A 20% decrease in supply doesn’t equal a 20% increase in price. Price will continue to rise until there is 20% less demand.
From a macro standpoint oil prices really have raised that high. Adjusted for inflation, oil prices in 2012 were around $176 per barrel.
Luckily the US has been decently protected from this global supply shock.
What’s happening right now in oil and gas is the result of supply/demand because oil/gas in an inelastic product.
A 20% decrease in supply doesn’t equal a 20% increase in price. Price will continue to rise until there is 20% less demand.
From a macro standpoint oil prices really have raised that high. Adjusted for inflation, oil prices in 2012 were around $176 per barrel.
Luckily the US has been decently protected from this global supply shock.
This post was edited on 4/1/26 at 10:51 am
Posted on 4/1/26 at 10:50 am to Dire Wolf
My parents used to own a gas station. The margins for gas are almost nonexistent after expenses is probably negative. It’s primarily to force beer and cigarettes sales.
Posted on 4/1/26 at 10:54 am to Everyday Is Saturday
quote:
Has your view changed as a result of this real-time experience?
Corporations price gauge when Democrats are in office, but when Republicans are in office that's just inflation.
Posted on 4/1/26 at 11:46 am to LSUWoodworker
quote:
Its free market capitalism
Sure, so is destroying your brand when every customer you gouged remembers what you (the owner) did. Also, if you're prepared to jack up prices and they become that valuable, you better have an equal rise in security or your store will be simply looted out of spite.
Posted on 4/1/26 at 12:46 pm to Bayou_Tiger_225
Not to mention oil prices are not tied directly to present value. Rather, they are traded on a futures-based contract basis, and market uncertainty generally leads to greater volatility.
Posted on 4/1/26 at 12:51 pm to fareplay
quote:
The margins for gas are almost nonexistent after expenses is probably negative
But when gas prices go up, the state's tax revenue increases too.
Posted on 4/1/26 at 1:26 pm to Hondo Blacksheep
quote:exactly.
Not to mention oil prices are not tied directly to present value. Rather, they are traded on a futures-based contract basis, and market uncertainty generally leads to greater volatility.
I could have written a small paper trying to explain OP’s question
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