Price gouging

Discussion in 'Economics' started by nutmeg, Nov 9, 2012.

  1. We know laws regarding "price gouging" is politics.

    But I wonder if one could circumvent the law.

    Suppose you sell gas @ 4 bucks a gallon and you limit customers to 20 gals per vehicle so we'd have a 80$ sale.

    So the deal is: gas is free but you have to buy a hot dog and a coke for $150 to get the free gas.

    Or somehow charge admission to your gas station, maybe have a band on the parking lot.

    Just looking for ideas.

    What the heck is stub hub? maximizing price, but not gouging?

    Suppose I have 10k gals of gas in my underground tank and sell it all to one guy. Now this new owner of my gas, (who is now renting my underground tank and pumps can charge whatever he wants for the gas.

    just kicking around ideas.
  2. The hot dog and the coke wont work because it would be considered price gouging for the hot dog and coke because you are charging more than normal market value. What I would do is find a bunch of local artists who are starving. Have an art show at the gas station and anyone who buys a painting gets 10 gallons of gas free with the painting purchase. The paintings would cost for example $500 each, and you collect $250 of each purchase for "renting" the space to artists (generally artists only get 50% of whatever a painting sells for in a gallery, so it wouldnt be considered price gouging because that is the going rate). Since the value of paintings are subjective, you could really charge whatever and it wouldnt fall under price gouging laws.
  3. One: I charged higher prices than my competitors. I’m in for exploiting consumers, profiteering, and monopoly.

    Two: I charged lower prices. I’m in for predatory pricing and cutthroat competition.

    Three: I charged the same prices. I’m in for collusion, price fixing, and cartelization.
  4. maxpi


    Kudos!! Thank you for that reality based analysis!! That is the kind of work we need more of on ET.
  5. Your welcome...:)

    I was looking around and consensus of economists: price controls contribute to continued shortages and hoarding. First come first served.

    Laws against price gouging discourage rebuilding supplies quickly for fear of breaking the law and retailers just close up rather than risk litigation or reputation.
  6. If I have a tanker truck of gasoline scheduled for delivery to customer A but an emergency load is needed for customer B.

    If I am unable to charge more for customer B why piss off customer A and cancel his delivery and supply customer B?

    For the trucker at what price is it worth my while? This wouldn't be my call, the retailer would make me an offer I couldn't refuse.
  7. Bob111


    ----The hot dog and the coke wont work because it would be considered price gouging for the hot dog and coke because you are charging more than normal market value. ---

    i have problem with this in capitalistic\free market world..there is NO SUCH THING AS "NORMAL" MARKET VALUE. if it is-then all stocks would be priced at let say-$10? if you have a huge demand and NO supply-how the f**k you can come up with "normal" market value? the normal is what people are willing to pay for it.
    have your ever seen spikes in stock prices during the day? why can't SEC bust all trades that are away +/-1% from where they are 5 min ago? cause that was the case! they are away from "normal"..
    don't like the price? then simply don't buy it..
  8. At the end of the day it is any one finds out. If there is an over priced deal then if the relevant parties find out they will do something about it it doesn't matter how you do it.
  9. Morgan I think you nailed it. But I'm not done yet. For example.

    Most retailer have a mfg suggest list price followed by an "our price". Well, in an emergency "our price' is no longer honored but sell everything at mfg suggested list price.

    Without a doubt you can buy clothes with some ridiculous retail price tag on it. $50 dollar tag and you pay $15. Same goes with "hot" items in an emergency.

    auto retailers have a mfg price thousands of dollars over what you're likely to pay, so this is not a new concept.

    You can apply this strategy to generators, chain saws, pumps and other big ticket items. Might take some thought to work this out on batteries, water, gloves respirators, etc.

    If some cutomer walks in and starts complaining about "gouging', excuse yourself, tell that customer you have to go to the bathroom and sell the product to someone else. Who needs the litigation headache from some broke ass prick.
  10. Uh oh....Now I've got it.......

    I know how to lower medical care costs.

    Yes.. yes... Yes...

    "Call the hospital and ask to go over your bill. You may find that as soon as you point out that $6 dose of Tylenol on line 12, is price gouging....."

    Hospitals are price gouging. It was an emergency, I had a friggin headache, it's not like I could run down to duane reade and buy a bottle. I'm calling sumbody to do sumpin.
    #10     Nov 11, 2012