People have been getting into arguments at grocery stores hoarding toilet paper, hand sanitizer, and bacterial soap among other things. News outlets have reported on Amazon and eBay pulling listings trying to "gouge" prices. But would price gouging create a market where items like this actual get rationed due to adjustments in demand? In this episode Derek goes over elasticity of prices and arguments for and against charging higher prices that would adjust supply and demand back to equilibrium.

What is price gouging?

What is elasticity of price?

Arguments that laws prohibiting price gouging are bad

Why have price gouging laws created opportunities for third party sellers to inflate prices?

What is retail arbitrage?

Examples of raising prices to ensure supply comes into an area

Supply vs Demand in marks

Would rising prices cause people to only buy what they need? (self-rationing)

Ideas for you to study the issue and make up your own mind

How airlines adjust prices to spur demand

Airlines execute "price discrimination" charging business travelers more

Incentives to increase supply

Mentioned in this Episode:

Someone stuck with 20000 bottles of hand sanitizer after Amazon removed listings https://www.nytimes.com/2020/03/14/technology/coronavirus-purell-wipes-amazon-sellers.html#commentsContainer

Forbes article that laws against price gauging are bad economics https://www.forbes.com/sites/jeffreydorfman/2016/09/23/price-gouging-laws-are-good-politics-but-bad-economics/#425d325a64d3

Stossel video on price gouging https://www.youtube.com/watch?v=IqMFBdWkfo0&feature=youtu.be

Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek www.razorwealth.com