Re: price "gouging"
From: Les Cargill (lcargill_at_worldnet.att.net)
Date: 08/21/04
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Date: Sat, 21 Aug 2004 18:34:16 GMT
kevincar wrote:
> zerge@hotmail.com (zerge) wrote in message news:<f0a1621c.0408200654.54e49415@posting.google.com>...
>
>>kevindotcar@yahoo.com (kevincar) wrote in message news:<60bf9d3f.0408191413.7b1cd4e0@posting.google.com>...
>>
>>>zerge@hotmail.com (zerge) wrote in message news:<f0a1621c.0408191053.42cd3bc6@posting.google.com>...
>>>
>>>>beliavsky@aol.com wrote in message news:<3064b51d.0408180451.1c5d2af0@posting.google.com>...
>>>>
>>>>>It is natural that the prices of needed supplies and repair services
>>>>>spike after an emergency like Hurricane Charley , but the New York
>>>>>Times and others call it "gouging" -- see
>>>>>http://nytimes.com/2004/08/18/national/18scams.html?hp . Why can't
>>>>>people grasp basic economics? They should read Thomas Sowell or Henry
>>>>>Hazlitt.
>>>>
>>>>Indeed.
>>>>
>>>>Price gouging: pricing above the market when no alternative retailer
>>>>is available.
>>>>
>>>>Since alternative retailers ARE available, and are charging high
>>>>prices also, it is not gouging. QED.
>>>
>>> Then it's no big deal - it's just "price fixing".
>>>
>>>K.C
>>
>>Price fixing: An illegal practice in which competing companies agree,
>>formally or informally, to restrict prices within a specified range.
>>
>>These companies do not seem to be restricting prices; rather, they are
>>increasing prices according to normal supply and demand curves.
>
>
> I don't think the supply-chain side of the goods has changed that
> much; everything from Flex hoses to antibiotics are just as easy to
> get to the state as ever. But because the Demand is now higher,
> the suppliers are playing games with the consumers.
>
>
No, they are using price to adjust the number of
customers down to the available supply, in a
control-feedback parameter sense.
If the price gets high enough, it signals that
it's worthwhile to add capacity.
It is "playing a game" after a fashion, but not
in the perjorative sense implied here.
The problem with this in medical services is at least
twofold: demand is entirely inelastic and the payer-payee
systems are complex enough that we get nice little
price spirals.
>>The main objective of price fixing is to avoid price wars. Since
>>demand is way up due to the destruction brought by the hurricane,
>>there is very likely no price war going.
>
>
> I think you are thinking of "price freezing". "Price fixing" is
> conspiratorial activity among suppliers and is illegal.
>
>
>>Or was your post just a joke? :)
>
>
> No, was yours?
>
> K.C
-- -- Les Cargill
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