When (if ever) should we have government protection from price gouging?

Question

Is there ever a time when the government should step in and protect us from price gouging? ...A monopoly situation maybe?

Answer 1

Price gouging, by definition, is when a company prices something higher than it's worth because there are no alternatives. As such, it always takes place in a monopolistic situation (or as a result of collusion between multiple companies, which in effect is a monopolistic situation).

Because there is no benefit to this other than to the company or companies involved, it should always be illegal.

Answer 2

Government should never interfere in the free market.

Even in the case of a monopoly, the market will correct itself.
If the government regulates the monopoly, prices will be artificially lower, thus discouraging competition, because the new business could not absorb the additional start up costs. However, if the monopoly raises their prices too high, new competitors will enter the market, thus driving prices down in the long run, which would benefit the consumer more than allowing a monopoly but with government interference.

Answer 3

Monopolies are broken up or when they can't be (utilities), regulated to prevent market inefficiencies. In competitive industries it works better than markets only in rare circumstances to make sure that things needed for survival are available to all. If such a policy is put into place you also need to have a rationing system or another method of allocating consumption or it will just produce shortages that will still leave some people without the necessities of life. Britain during WWII did not have enough food so such a policy was put into place with strict rationing, and everyone cut back of food consumption, but no one starved. Under conditions where the rich eat and the poor starve political instability is the result and revolutions occur, for example the French revolution and Russian revolution

Answer 4

You should outlaw price gouging any time that you decide you're willing to have LESS of something in order to have it available at a LOWER PRICE. But note that you will (virtually) never have the second without the first.

Personally, I'd rather, for example, pay $3.50 a gallon for gas whenever I want it, than to have $2 a gallon gas whenever it's available. Talk to someone who lived through the gas lines of the late 1970s before you're tempted to argue otherwise.

Answer 5

because of the fact socialism doesnt artwork. its been proved throughout the time of historic previous to convey approximately something lots worse than capitolism. Take russia case in point. They began as a socialsim, and each physique shared each thing. however the government that became meant to truly distribute the wealth and products grew to grow to be corrupt and would not enable go of its power. This then delivered approximately communisim. the priority with socialism is that human beings won't be able to proportion and the won't be able to furnish up power. in case you place somebody in fee, they might maximum possibly income on the region, and that they might fairly not opt to offer up their power. So what you ultimately finally end up with is a communist state the place each physique is fairly undesirable. attempt to think of of a few known utopian books like 1984 and The Giver. those societies are utopian, yet in addition socialist because of the fact each physique shares each thing. there is no determination, the government controls what we do. Now tell me, might you supply up all your freedom, your wealth, your possibilities and throw in you bid for socialism so which you will have what each physique else has and stay in a predictable and crappy society. i particular as hell would not, and capitolism in united statesa. has come a protracted way. Its now not as undesirable because of the fact the business revolution, and we've significant government administration over the financial gadget. In lamens words, socialism = not extra freedom, and human beings delight of their freedom a great deal, so thats why we hate the assumption of socialism.

Answer 6

When the product/service is essential for sustaining a productive, healthy life. Allowing people to freeze to death to make a higher profit on natural gas or other heating fuels is immoral and selfish.

To the guy about the gas lines in the late 1970's I was there and I would gladly wait in line if it means people do not suffer worse fates for excessive profits of the oil producers.

Answer 7

Depends of wether you want a socialistic society or a capitalistic society. Read the Wealth of Nations