Answer to Question #135777 in Microeconomics for Jishoane

Question

Is it better to crack down on price gougers or spark a reform on counter-
productive laws instead?

Answer 1

It is better to spark a reform on counter-productive laws than to crack down on price gougers. Price gouging is the deliberate attempts to increase the price of commodities during pandemics by shrewd businessmen (Riley et al., 2019). The acts are portrayed as taking advantage of calamities to profit. Many states have different laws for curbing price gouging but have not been effective. A crack down on price gougers can only be effective if the calamities lasts only a few weeks and are not recurrent. However, Covid-19 has indicated that calamities can last for months on end inferring that it will not be effective to trace specific price gougers. An effective national law put in place can address price gouging adequately and use minimum resources than having crackdowns on price gougers every now and then when calamities strike.

References

Riley, W., Coult, N., & Love, K. (2019). An analysis of price gouging in the US healthcare system. Journal of hospital administration, 8(6), 7-16.