In terms of fairness, anti-price gouging laws require producers to sell goods below their market-clearing price: the market clearing price is the amount at which quantity supplied is equal to quantity demanded. If goods are priced above their market-clearing price then there will be a surplus of goods and the converse leads to a shortage of goods. Under anti-price gouging laws, consumers are unable to buy the necessary goods which they desire in a time of need.
According to the neoliberal approach, anti-price gouging laws prevent allocative efficiency. Allocative efficiency refers to when prices function properly, markets tend to allocate resources to their most valued uses. In turn those who value the good the most will be willing to pay a higher price than those who do not value the good as much.[5] According to Friedrich Hayek in The Use of Knowledge in Society, prices can act to coordinate the separate actions of different people as they seek to satisfy their desires.[6] Prices fluctuate with changing desires and convey information to buyers and sellers about supply and demand of goods.
Many economists argue that laws against price increases serve only to restrict supplies of a good or service by reducing the incentive suppliers have to undertake any additional costs, hazards or inconvenience that may be required. They argue further saying that these price increases force consumers to ration goods thus increasing the longevity of certain resources in an emergency.