Which of the following is true about price gouging laws? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b C d Price gouging laws are an example of binding price floor. Price gouging laws result in a surplus of goods in states after major weather events. Price gouging laws reduce the quantity supplied compared to an unrestricted market. Price gouging laws are only binding when they are above the equilibrium price.
Price gouging is when a seller raises the price of their goods or services to an amount that is deemed unfair and unjustified. It develops as a result of a sudden increase in demand and/or a scarcity of supply, typically as a result of a natural disaster like an earthquake or hurricane. Price gouging is thought to be unethical and immoral since it involves sellers taking advantage of consumers by sharply raising prices. For instance, there was a significant spike in demand for hand sanitizers, which assist prevent the spread and contraction of the disease, during the Coronavirus outbreak. People were scared and bought supplies, reducing the supply. As a result, hand sanitizers were overpriced and sold for more price.
Step by step
Solved in 2 steps with 1 images
