Laws Against Price Gouging

[Kidlicious]

It doesn't make sense to me why a majority of Americans find it offensive that Exxon makes $30 billion profit, but not offensive when they make $20 billion profit. That is what it is though, I guess. But now Congress is proposing fining those who engage in price gouging.

The term price gouging doesn't come from the field of economics. Free market economists call it economic profit.

Regulating price gouging/economic profit would be a type of price control.

Since I'm just as pissed of when the price of gas is $2 a gallon this is not really a big issue for me, but I'm just interested in a discussion of how regulating price gouging would work.

When firms get economic profit we expect other firms to enter the market and the price is suppose to reach equilibrium so that all the firms only get normal profit again.

Here's my view. In reality firms can't predict the future price so they really can't make a decision. The tendency is for a glut to develope if prices get too high, because firms expand production too much. This causes prices to fall below equilibrium. The refining industry is a good example of this. So some control over prices seems appropriate and would appease many people.

[Japher]

regulations are good at times
bad at others

[DinoDoc]

What gouging is going on anyway?

[Japher]

have you seen the price of avacados!

[Lorizael]

Originally posted by Japher
regulations are good at times
bad at others

You are a ****ing poet.

[Kidlicious]

Originally posted by DinoDoc
What gouging is going on anyway?

That depends on how you define it. If you define it losely, the way most people do, then there is a whole lot of gouging going on. You could be gouging when you sell your house.

[DinoDoc]

Originally posted by Japher
have you seen the price of avacados!

I don't like them anyway.

[Japher]

You are a ****ing poet.

I have this uncanny insight

[Lawrence of Arabia]

yossarian lives

[DinoDoc]

Originally posted by Kidicious
That depends on how you define it. If you define it losely,

Wouldn't we be stripping the word of any real meaning if we went down that route?

[Kidlicious]

Originally posted by DinoDoc
Wouldn't we be stripping the word of any real meaning if we went down that route?

Ok, you define it.

[DinoDoc]

I don't have a real answer for you. However, I would argue that whining that you think the price is too high without any real evidence if it actually is only serves to make the person doing said whining look like an unmitigated fool.

[Lorizael]

Price gouging comes into effect, imo, when the demand for a product outstrips the consumer's ability to purchase that product.

People need oil in order to maintain their chosen lives, and will pay just about anything in order to get that oil, even if the expenditure is harmful to them. Thus, the suppliers of oil can abuse their customers by raising the prices to unreasonable levels (that being a nebulous term).

As much as I hate to admit it, Dubbaya really was correct when he said that Americans were "addicted" to oil.

[Arrian]

It doesn't make sense to me why a majority of Americans find it offensive that Exxon makes $30 billion profit, but not offensive when they make $20 billion profit.

I agree.

-Arrian

[DinoDoc]

Originally posted by Arrian
I agree.

-Arrian

Why? A lot of companies have a better profit margin. Are Americans really such pussies that we ***** and moan about low gas prices because we think that they should be lower?