What can we say about price gouging? In open defiance of what everyone learns in an introductory economics class about the laws of supply and demand, politicians in New York and New Jersey (and elsewhere, no doubt) are vigorously enforcing their laws against price gouging and implementing alternative rationing mechanisms like even-odd distribution.
To help explain this, I turned to Brian Wallace from Nowsourcing, Inc. and asked him to put together an infographic on price gouging. Youve seen some of Brians work in this space before. Enjoy!
And economics students, note well: theres one minor quibble here: rising prices dont reduce demand. They reduce quantity demanded. But just about the only time you will ever need to know the distinction is in an economics class.
One of the firms for which Mr. Wallace does some work (bestcriminaljustice.com) was kind enough to sponsor the infographic above.
Art Carden is a Research Fellow at the Independent Institute in Oakland, California and an Associate Professor of Economics at Samford Universitys Brock School of Business.