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To: staytrue
Gouging is when the customer needs something that is critical to their health and when the supplier has a monopoly over a short time period.

I'm sorry, but you don't get to define gouging for us.

"Gouging" (to the extent that it exists at all) can occur without a monopoly and without a real shortage, and without any threat to health or safety.

All it takes is a perceived shortage, or a perceived impending shortage.

Further, in those cases where such a perception triggers panic buying, the natural tendency is for prices to go up, because a properly functioning market derives the highest price the customer is willing to pay, and/or the lowest price at which the supplier is willing to sell. This is a GOOD THINGtm. It regulates demand. It regulates supply.

Gouging is ill defined, but generally is perceived to be any price which results in "excess" profits (what ever that might be). Gouging is largely a pejorative used to describe a market situation unfavorable to the the person making the allegation. There is no universally accepted description of the term in Economics.

Gas stations in Atlanta can charge $6/gal not because there is an actual shortage in Atlanta, but merely because there is a perceived future shortage.

They can do this without any collusion in what clearly is a non-monopoly situation, by simply doing business according to the free market principals.

277 posted on 09/03/2005 3:44:05 PM PDT by konaice
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To: konaice
This is a GOOD THING. It regulates demand. It regulates supply.

Right on! Dr. Sowell would be proud of you :-).

293 posted on 09/03/2005 5:17:09 PM PDT by Tax-chick (How often lofty talk is used to deny others the same rights one claims for oneself. ~ Sowell)
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