Price Gouging

trident university international |

PRICE GOUGING |

MODULE 1 |

|

Charles Taylor |

1/22/2015 |

Price gouging could be unethical depending on the person and how they look at the situation. Price gouging is defined as charging a price higher than the normal or fair, during a time of natural disasters or other crisis. It is typically looked at as being immoral and unethical. Some great examples of price gouging were during Hurricane Sandy which affected the New Jersey and New York area. A Lukoil gas station in Paterson NJ, charged $5.50 for a gallon of gas which was $2.05 more than the normal. That increase was 59% more than the pre storm price. There were other gas stations that hiked up there prices more than 30% of the pre storm price. Another good example of price gouging was a Howard Johnson in Parsippany, NJ in which they hiked up there room prices to $119 a night from their normal high of $90 a night. That might not seem so bad but with $30 extra dollars a night for a week is an extra $210 and times that with close to 200 units that’s close to $42,000 extra just because of a storm.

On the flip side of price gouging, basic economics states that if a product is in demand that it’s not possible for everyone to get what they want at an original market price. If the price stayed the same and the product was in demand, like in a crisis, then that would create a shortage in supplies and there wouldn’t be an incentive to make more of the product. Meanwhile, the supplier would eventually take a loss.

My personal opinion about price gouging is basically it’s unethical in certain situation. I think hiking up prices on gas is unethical, especially during a time of crisis. As for as for hotel prices, I can honestly see why the prices would actually go up a tad bit. I compare that situation to the way Walmart or any other department stores that have to hire more employees during the Holiday season. Walmart have to hire more employees during...