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Price Gouging

Discussion in 'Legal' started by NCP24, Oct 11, 2005.

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  1. NCP24

    NCP24 Member

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    http://www.wsjs.com/news/top_stories.shtml
     
  2. Molon Labe

    Molon Labe Member

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    Assuming there's free-market competition, and assuming there's no collusion going on, there is no such thing as "price gouging." All prices are exactly what they should be.
     
  3. NCP24

    NCP24 Member

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    But what about during and in the wake of natural disasters?



     
  4. jefnvk

    jefnvk Member

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    I don't see why it is so hard for people to se the station/companies own the gas, and if you want it, you have to pay what they are asking. Just because there was some disaster, doesn't mean that the laws of economics should be suspended.

    That said, this appears to be more contract dispute and harassment than anything.

    Come to think about it, many here seem to be stockpiling ammo and food in case the SHTF, because it will be worth its weight in gold. Can't see how that is any different.
     
  5. Kjervin

    Kjervin Member

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    this seems to me to be all about collusion:
    1) everyone raises their prices but one guy
    2) the customer go to his store
    3) the guys who raised their prices complain to the gas distributor
    4) gas distributer tries to coerce (padlock his pumps :what: )lone holdout to get with the program (here's the problem)
    5) guy refuses and distributor backs down.

    I have no problem with the other guys raising their prices, but when they try to go "goodfellas" on the guy who doesn't, a line has been crossed, IMHO. You should be able to charge whatever you want at your store (and face the economic consequences) but trying to get your competitors to go along by coercion or agreement is not "free- market competition"

    Kj
     
  6. NCP24

    NCP24 Member

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    Good point.
     
  7. Waitone

    Waitone Member

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    I think the convenience store operator ought to be required to post the gross margin he makes on gasoline (both in absolute dollars and % of sales price)

    RIGHT ALONG SIDE THE MARGIN HE MAKES ON CHEESE DOODLES, DORITOS, diet coke, and lotto tickets.

    We can then get the attorney general to launch an investigation into price gouging by the manufacturer of cheese doodles.

    If you gonna bellyache about price gouging, lets crack down on all of it. :evil:
     
  8. wingman

    wingman Member

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  9. petrel800

    petrel800 Member

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    Price gouging is nothing more than a term used by politicians to grand stand and buy votes.

    Collusion on the other hand is and should be illegal.

    "The American consumer is being raped on fuel , oil companies are pulling
    in huge profits, spin it anyway you like the economy is going to be hurt
    in coming months."

    Wrong, the American consumer has chosen gasoline engines as its primary mode of transportation. There are plenty of alternatives availible to the american consumer. If you don't like the prices do something else. There is nothing wrong with a company making huge profits. Nobody goes into work in the morning for free.

    If the economy fails it will only be because of government interference. Call your congress critter and tell him to vote through measures to allow for more refineries and drilling in Alaska. Increasing supply or decreasing demand are the only two ways to lower prices.

    You can decrease demand by buying a car that runs on an alternative fuel, or you can tell government to get out of the way which will lead to more supply. Both of those options are better than sitting around complaining about the big bad oil companies.
     
  10. Camp David

    Camp David member

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    It goes way beyond "free market competition" and involves much more than "free trade"! It is price gouging, pure and simple!

    On my way to work there are four (4) seperate Exxon Mobil filling stations... this morning gas prices on unleaded "regular" ranged from $2.99 to $3.15 per gallon, each station different, even though they all sport the Exxon Mobil name. Why?

    Now you might think that it is just fine and dandy that local vendors charge what they want per gallon, but what about vendors that service them? Do you know cigarettes are highly regulated by FEDERAL GOVERNMENT? Thus company that delivers cigarettes to gas stations is required to charge a basic rate which cannot change as stated by State and Feds, YET GAS station can charge what they wish for gas with no regulation? Why is that?
     
  11. Molon Labe

    Molon Labe Member

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    Each station sets the price according to the supply and demand relationship at its own store. This is a good thing, and ultimately means a lower price or better service for the consumer.

    If you want to claim "price gouging" is occurring in a certain market, you must prove one of the following:

    1. There is no competition (monopoly).
    2. There is collusion.

    If you cannot prove #1 or #2, then you have absolutely no basis for claiming "price gouging" is occurring.

    For more information, read an introductory book on economics.
     
  12. NCP24

    NCP24 Member

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    In theory.

    I don’t know, but what I don’t understand is if the gulf only supplies ¼ of our fuel how come in many cases the mark-up was 150 to 200% or more? On top of that weeks before Katrina hit the oil companies were projecting sharp increases in cost, I think it had something to do with the Holidays?
     
  13. TaxPhd

    TaxPhd Member

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    If price gouging exists, why don't the evil gas stations charge $25/gal. for gasoline?

    That's right, because market competition keeps the price at the market determined $3/gal.




    Scott
     
  14. foghornl

    foghornl Member

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    My humble 1/50th of $1 (adjusted for higher prices :neener: )

    I remember after some disasters, some 'lumber yards' and stores going nuts with pricing...claiming they were pricing high so that everyone could buy some of each item and no one could hoard it all.

    1/2" CDX plywood that was $5 or $6 for a 4'x8' sheet before was as much as $25 per sheet after.

    Bottled water, about $2.50 per gallon in various sized jugs, was going for $15/gallon after.

    Places that were open (greasy spoon eateries) that normally served a decent breakfast for about $5 were over $12 for same meal. 2 eggs/bacon/toast & juice or coffee or soda.

    Hey I'm all for free enterprise and everybody making a buck...However; when you are trying to make $10 because of 'hard times'...uhmmmmm thats questionable at best.
     
  15. MasterPiece Arms.com

    MasterPiece Arms.com member

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    This thread needs some of this: [​IMG]

    If we're going to talk about price gouging, how about having to pay $25+ to have my own property transferred to me? :cuss: The founders weren't poor men. I'd bet cash on the barrel that if Patrick Henry were alive today (if he wasn't in jail-sold up the river by his fellow citizens on a jury-for making MGs) he'd AT LEAST go get an FFL JUST to have a no cost transfer festival (ok, maybe he'd recoup the cost of the FFL, but maybe not, because he understood that a little sacrifice makes a patriot hardened and perma pissed at tyranny).
     
  16. Molon Labe

    Molon Labe Member

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    foghornl: Every seller has the right to set the price of the goods at whatever they want. As an example, I have the right to stand on the street corner and sell bottled water for $100/quart. Of course, no one would buy it. Which will force me to lower my price. See how it works?

    This also means that, if the seller in your example was selling plywood for $25/sheet, and people were paying $25/sheet, then that's what it was worth and the price is correct.

    "But what if there’s no competition?" you ask. Simple. If there's money to be made, competition will pop up, and the price will go down.

    With all due respect, you need to read a book on economic theory.
     
  17. Camp David

    Camp David member

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    So the same gas delivery truck which refills all four Exxon stations charges each a different price? :eek:

    No I don't... I have to see widely varying prices for the same item in the same vicinity. Which I did. :mad:

    When they broke up the Bell telephone monopoly they couldn't prove #1 or #2, but they broke it up regardless...Why? Price gouging... they relied on common sense.

    For more information, take a course entitled "Common Sense 101"!

    Gas companies are making tremendous profits of an item whose price per unit (gallons), as determined at the refinaries, has been relatively stable. This profit is passed down to individual franchise operators, who fluctuate prices based on their whim and what they see others doing... I know this because gas delivery drivers, who fill up several stations from delivery trucks, charge the same price per gallon to all vendors serviced. This price has been stable for some time....
     
  18. Molon Labe

    Molon Labe Member

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    I don't know how many ways to tell you this, Camp David. First of all, sellers are allowed (and should be allowed) to set whatever price they want for their goods. This is a good thing, as it (usually) prevents shortages and surpluses. Secondly, if you see the same product for sale at different locations w/ different prices, then why not purchase the product from the seller with the lowest price? What's wrong with that?
     
  19. NCP24

    NCP24 Member

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    So a natural disaster should be viewed as just another opportunity to profit, even at the cost of human suffering?
     
  20. Molon Labe

    Molon Labe Member

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    Profit and competition are always good things, regardless of the circumstances. Why? Because it's the best way of preventing shortages and surpluses, while at the same time giving the buyer the best deal.
     
  21. HankB

    HankB Member

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    Funny thing . . . when I read this, I had a flashback to a few years ago when our friend Chuckie Schumer wanted to investigate the pricing of corn flakes . . . :rolleyes:
     
  22. NCP24

    NCP24 Member

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    Molon Labe you sure drive a hard bargain.
     
  23. R.H. Lee

    R.H. Lee Member

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    Where does the 'free market' end and coercion begin? Let's say you're in a traffic accident and went through the windshield. You're spurting blood when the ambulance pulls up and offers to sell you some for $1000/pint, cash or credit card in advance only. Would you support the 'free market' in action? Or would you assert there are some circumstances where other consideratons override the bottom line?
     
  24. Molon Labe

    Molon Labe Member

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    Stubborn SOB, ain't I? ;)

    Even though I was an engineering student, I took a lot of courses in economics as an undergrad. I have always had an interest in the subject, and I take guilty pleasure in educating others on the beautiful logic of free-market economic theory.
     
  25. Molon Labe

    Molon Labe Member

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    So let's say there was a ambulance company practicing the tactics you described. Due to competition, companies would naturally sprout up that would offer lower prices and credit. Problem solved.

    "But what if the ambulance was the only one on the scene of the accident? And you were minutes away from death??" you ask.

    Well then... we no longer have competition, do we? It would be a monopoly, and thus the rules no longer apply. (Note in all my previous posts where I assume there is competition.) Because there's no competition in your example, we have laws to protect people in this circumstance.
     
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