Question

When a basic commodity like gasoline goes through a period of sharply-rising prices, we often hear charges of “price gouging!” hurled against sellers in our community. These charges imply that the government should control price, in order to prevent gouging. Do you agree that the government should set price during these periods? Why or why not?

Answer 1

Price gouging is a pejorative term referring to when a seller spikes the prices of goods, services or commodities to a level much higher than is considered reasonable or fair, and is considered exploitative, potentially to an unethical extent.

When no alternative is available,retailers increase prices. In case of emergency, any natural hazard, scarcity of any resource etc.

As Gasoline is now a basic necessity.People need it to get to work, producers need it to move products. It is a key part of our economy.Hence government should set price to save a common man from price gouging.

Although it was a basic need but price set interrupts the normal flow of market supply and demand which is not good for any free economy.Market itself a driving force for any economy.