Price Gouging

When the sky darkens and the wind starts to howl, you know what that means: another storm. What happens when the rain or hail stops is equally predictable. There’s a shortage of in-demand goods, and prices go up — then people complain about price gouging.

Over at Knowledge Problem, Michael Giberson has a great post about price fluctuations in response to shortages. He points out that the only way for a store or gas station to stay open and on the right side of the law is to charge high prices all year round.

You’d hope people would conclude that price controls are a bad idea, not that we need more of them. But just in case, Giberson ends with this message:

I’m intending to point out a potential absurdity in the way price gouging laws work, not trying to suggest that the state government become even more involved in fixing prices.