There is no such thing as price gouging! If an individual owns any sort of property, it is not the proper function of government to tell him what he's allowed to sell it for. If I put out an offer to sell AAPL at $500/share, is that price-gouging? If I were to put my home on the market for $20 million (When it's clearly only worth a fraction of that), that should be my right. Nobody is forced to pay these prices against their will. Laissez Faire. If people are willing to pay $6/gallon, that is their choice. Victimless activity should never be a crime. The only 'gouging' I see, is how the government takes away our money by force, and then uses it to take away our drugs by force.
Before attempting to answer such questions in the ET comedy forums, one should first define: (1). What is price? (2). What is price gouging and what defines its exsitence with respect to (1) above?
I bought one computer/year for 6 years... And there were significant problems with the last 3 deals. Dells are actually very reliable... So it took several years for me to learn just how proprietary their systems are... (For example, each of my 6 Dells has a different, non-compatible power supply)... And how they gouge people on parts. But now I know I can get any part on EBay... And install it myself or local shop... So my relationship with Dell is over. But most importantly... All my systems going forward will be custom built LOCALLY using ** off-the-shelf parts **... That way I will be able to fix any problem locally within hours by replacing a stock part. 2-3 years from today I will have no Dells... But I am going to continue bad-mouthing Dell for a long time... For their deceit and price-gouging practices. Because it's important to ** fight against injustice **... And overall... Dell will lose money by f*cking with me. That fact that you defend price-gouging is unfortunate... and irrelevant to me.
Your former professor is wrong. Price gouging exists. I think of price gouging as taking advantage of shortages of human necessities where profits come at the expense of human suffering. Your professor may not come to grips with price gouging because it is more of a moral issue as opposed to a purely economic one. I do believe the oil companies are skirting with price gouging. Gasoline, for many, is a human necessity. Notice that despite billions in profits, the major oil companies are refusing to build more refinery capacity (in a truly open and competitive marketplace they should be rushing to build more capacity). Instead they choose, in a manner that raises the question of possible anti-trust collusion, to keep refinery capacity limited and prices propped up. Personally, I would like to see the government threaten to build a publicly-owned refinery if Exxon doesn't. That oughta get their attention.
too funny. as I read your post, I began to see an obsessive shaping up in my mind's eye: Dell will lose money by **** with you. Yeah, right. That last line, however, was icing on the cake. Where do I <i>defend</i> price gouging? Please, it's a rhetorical question. You answer at the risk of looking less credible.
Your first mistake I don't know why, but econ professors tend to have an overly simplistic view of economics and reality. Usually they think the country should be an anarco-capitalist state.
Care to elaborate? This doesn't do much good - you are deriding the opinion of another member without explainingwhy you are doing so. Also, you have not explained how you see the $3 bottle of water being sold to rich NY kids as price gouging. Care to provide a rationale for that? In my view, it's capitalism. They are willing to pay that price. If the price becomes too high, another supplier will step in and provide the service or product at a lower price. In this situation, there is absolutely no compulsion for the kids to buy $3 bottles of water - they are rich kids in NYC. How is this price gouging??
In the econ classes I took decades ago they taught that industries with fewer than 6 to 8 suppliers were oligopolies, and in oligopoly markets those few suppliers can engage in monopolistic pricing practices even without explicit collusion. Congress and the DOJ have seen fit to approve too many oil company mergers, so now we have monopolistic pricing, otherwise known as price GOUGING. Another example of handing over the keys to the kingdom to big business while letting the little guy get it in the neck.