Please note! This essay has been submitted by a student.
There has been a question around the world that has people wondering what is the right thing to do in a situation of crisis. The question that has positives and negatives to both sides is the question of “Should price gouging be illegal”? Price gouging is when prices are raised to an absurd price during times of emergency such as hurricanes, tornados, etc. Some people say price gouging is just a way to steal buyers’ money and it is unethical. Personally, I believe that price gouging should be legal because it encourages conservation, and allows store owners to have an incentive to stock up for emergencies.
Many people argue the fact that price gouging is unethical due to the fact it raises prices so high to the point where only the rich can afford the needed goods. People feel as if this just allows the rich to have a chance for survival during natural disasters which initiates the wealthy are more important than those with less money. Although I do see this as a valid concern, I do not believe this is the case. I believe that raising the prices for needed goods during emergencies allows people to budget their money and buy less of what they think they need. This in turn allows for more people to have the opportunity to buy the high in demand product. “Having higher prices of products allows for there to be more products in stock causing a “upward sloping supply curve “”(Murphy, 2017). If the prices are high, people will have to budget their money and buy what they can afford which will be what is necessary for survival. If the prices stay low then people will not think about others and just over stock on the product just because they can afford to do so. This leaves others with nothing during a life-threatening disaster.
One might think that store owners would think by now about stocking up needed supplies in case of emergencies in order to save more lives. But one does not stop to think of what incentive the store owner has to do so. If the prices are just going to stay the same during emergencies as they would on a normal day then why would store owners go through the trouble of over stocking? What if there is not an emergency the year they decide to overstock on goods and they have left over supplies? This would cause an excess of supplies meaning they have a market surplus on their hands. This does not seem like a very good business decision for just a what if situation. If they took the risk of buying more goods then needed in case of an emergency then they risk losing money. If price gouging was indeed legal then business owners have more of an incentive to go out of their way to get more products in stock in case of an emergency. Their incentive would be, they get to make more money off of going out of their way for a public good. Yes, it does seem selfish but putting oneself in a business owners’ shoes, would you be willing to put your business at risk for a what if situation? Because if one was willing to say business owners are selfish for not helping the public be prepared, then why can one not overstock their own houses with supplies in case of an emergency. People like to wait last minute to be prepared and blame everyone else but themselves.
Overall, I believe price gouging should be legal because it will help ration out supplies to more individuals, and give incentives for businesses to invest in emergency cases. We should all work together and help everyone in an unexpected emergency occurrence. Nobody’s life is more important than another life. Price gouging helps people think of other individuals and hold more value to needed items. People tend to take more care of things of higher value. If water becomes more expensive during a time of crisis people will think to cherish it and not take it for granted. Therefore, this is the free market working efficiently.