9/14/2005

Price gouging is when the price of a high demanded good is rising and rising until it is so high that it is ridiculous to buy. So is price gouging immoral? I think yes, when you are taking advantage of your customers. Price gouging is economically efficient and it will maximize your profit, but not for long. When the demand of the good is lowering, so will your profit. This is because when you take advantage of your customers, they will remember that for a long time and will find a more reliable and honest company to but that product. You will lose your long term customers. (http://www.truckandbarter.com)

2 comments:

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Dr. Tufte said...

-3 on Ava's post for a poorly formatted link, a link that doesn't go to a page related to the topic, and to title.

Price gouging is an idea that is badly abused. If suppliers are gouging now because prices are high, exactly what were demanders doing to suppliers when prices were low? Gouging?

I do like what Ava added to this discussion though - there is an element of strategy involved in a decision to raise prices: is it worth it to make more now, when you might lose something later.