Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu.
Price gouging occurs only under a narrow set of legally defined circumstances. Price gouging is a legal concept, not an economic concept.
When a natural disaster occurs and the governor of the state declares a state of emergency then the price gouging law of that state will go into effect, but only if the state has such a law.
The economic effect of price gouging laws is to put a Price Ceiling on all goods and services covered by the state’s price gouging law. Price ceilings always cause shortages.
- Read “Florida Lawsuits Allege Price Gouging,” and “They Clapped: Can Price-Gouging Laws Prohibit Scarcity?”
- Read the article from Chapter 4 in your textbook: “In the News: Price Increases after Disasters” (pages 84-85) – (Week 1 ) – The article is the same in both the 7th and the 8th editions, but the art work varies. Also read the article – The Problem with Price Gouging Laws .
- Watch the Price Gouging video above.
- Summarize the main points of each article and decide which graph (A, B, C, or D) can be used to explain each event and why – be specific. More than one graph may apply. (SupplyAndDemandGraphs2.doc and Supply and Demand Graphs.pptx )
- What is your conclusion? Is price gouging a good thing or not? Or is it just necessary? Explain why.
- Post your views to the discussion board and refer to at least two different concepts from this week’s Chapters. Your illustration of concepts MUST include an explanation why you think they are are relevant to the week’s topic using specific information from the articles, videos and other research that you have done.
- Each post submitted should be between 150 and 250 words. Keep them short, specific, and clear.
- Use paragraphs as appropriate.
- Very lengthy posts do not provide an incentive to be read.
- Remember to document all use of sources by using citations and references. These should be in APA format.
- Please review Plagiarism Powerpoints (PLAGIARISM.ppt ) and be sure to provide references (APA.ppt), including URLs where appropriate, to all works that you cite.