Why price gouging during shortages helps - 04/28/21
In response to the "Remember those who price gouged us on ammo".
In a competitive capitalistic market, price gouging actually plays an important role in the overall market. Not just in ammunition, but in all commodities. And we have seen where anti-price gouging legislation has had a very negative effect on markets.
So the role of price increases or gouging is to get the public to modify their behavior. It's the market's way to slow down demand so production can catch up. Its an important tool to stabilize markets when the behavior of the consumers gets out of balance.
None of us like it, but it has to happen for the market to stabilize. Until we do something to change the behavior of the hoarders, this market isn't going to stabilize.
This is economics 101...you learn this in your very first economics class.
In a competitive capitalistic market, price gouging actually plays an important role in the overall market. Not just in ammunition, but in all commodities. And we have seen where anti-price gouging legislation has had a very negative effect on markets.
So the role of price increases or gouging is to get the public to modify their behavior. It's the market's way to slow down demand so production can catch up. Its an important tool to stabilize markets when the behavior of the consumers gets out of balance.
None of us like it, but it has to happen for the market to stabilize. Until we do something to change the behavior of the hoarders, this market isn't going to stabilize.
This is economics 101...you learn this in your very first economics class.