Don’t Knock Price Gouging

Jim Cardoza has an interesting post over at Liberty Pen regarding price gouging at gas stations. I would add the following to his great comment: We understand the benefits of low prices but we have a harder time understanding the advantages of high prices. During a crisis, people will tend to panic and overstock on all essential items like gasoline. Higher prices tend discourage a mad dash to grab every drop of gasoline when there is not enough to go around. Ask yourself this regarding “price gouging,” would you rather have a gas station that decided not to raise prices to match demand and that ran out of gas or would you rather have a gas station that raised its prices to match scarcity and therefore never run out of gasoline during a crisis? Before you have an emotional response, think about it.