Reading Analysis of 'The Problem with Price Gouging Laws'

What did you find interesting or uninteresting about the piece? Was there something that seemed intuitive or counterintuitive? Explain.
It was interesting to read that, after all we've learned about the ineffectiveness of price-controlling czars, Tennessee's state government prosecuted gas stations for price gauging. The rise in gas prices was simply a result of the scarcity of oil during that particular time. The businesses selling gas were responding to the increased effort it took them to obtain gasoline by raising the prices. Is it possible that some sellers were dishonest in how big of an increase in cost of opportunities they faced? Yes, but for the most part, these distributors were likely responding to the fact that an increase in scarcity of a good insinuates an increase in price of that particular good in the market. Prosecuting firms for abiding by market "rules" is a bit ridiculous. A similar situation occurred in North Carolina during a storm. Men were arrested for selling ice at a higher price than it was marked at even though no one complained about paying the higher price. Ice was more valuable to the people so they were willing to fork over a little more cash to ensure their stock in the event of scarcity.

Discussion Questions
We learned that both participants of a market, buyers and sellers, work to achieve an equilibrium price for a good. How do natural disasters like the ones described above mess with the equilibrium price of something? How do buyers and sellers react to return to the "right price" of a good? Can they do it on their own or is outside intervention required? What is/are the consequence(s) of outside control?

Why do events such as natural disasters receive special treatment in the light of prices and allocation of goods that are different than the usual workings of the market? Is this "good" or "bad"? Explain.

Annotation
This reading describes the issues that arise because of price gauging laws. The people policing price increases during events of scarcity would need to know an astronomical amount of information in order for these laws to be even marginally effective. There is absolutely no way for them to obtain that level of knowledge, and therein lies the problem with such laws. I'm not suggesting that there should be a total market free for all during natural disasters because people don't always abide by the Silver Rule when it comes to transactions. Suing distributors for a natural economic response during scarcity, however, isn't conducive to the functionality of the market at all.