RAQIB IBRAHIM
ECO 201
ESSAY 2
What wrong with price gouging
In the article. “What’s wrong with price gouging”, by Jeff Jacoby, talks about, why it is not a good idea to increase prices at more than a higher expectation when there is a sudden shortage. This article is referring to the massive pipe break that more than dozens of town in Boston without drinking clean water over the weekend. After the aftermath, the prices of bottled water increased. Massachusetts Attorney General, Martha Coakley insisted the vendors not to increase the prices of bottled water since consumers would not be willing to buy at that given price. After hearing anecdotal reports of price gouging of water bottles. Martha Coakley stated
that, businesses and individual should not take advantage of the shortages by charging customers unfairly. Moreover, she said inspectors had been dispatched to check whether vendors are engaging in price gouging, and if they are legal action will be taken among those. Furthermore, her department has set up a telephone hotline to encourage public to inform about the price gougers. Governor Deval Patrick, also stated that there is never an excuse to take advantage in those areas, where is a water emergency. Additionally, ordered the division standards to monitor the prices of water bottle. “Suppliers worked overtime, pumping up production at regional bottling facilities and coordinating deliveries,’’ reporter Erin Ailworth noted. Polar Beverages in Worcester, for example, “had emptied out its plant in the city last night and trucked in loads of water from its New York facility.’’ Jeff Jacoby believes that increasing the prices of goods is not a good option, when there is a shortage in the market. Rather government should try to rationalize and put limits on the price control. Price mechanism is an economic term that refers to the manner in which the prices of commodities affect the demand and supply of goods and services. Price mechanism affects both buyers and sellers who negotiate prices of goods or services. According to my opinion, it would be a good idea if price mechanism is being used. Because of price mechanism, price of goods and services increase, this controls the demand in the market. So that people do not over buy goods what they do not need. Hence, this can stabilize the market and more people can enjoy the benefit of the good provided. Therefore, price gouging is a good option when the product is scarce in the market, this result to equal distribution of goods and services among the population
Setting prices too high would discourage purchasing and setting prices too low negatively affects revenue. While several pricing strategies exist, the use of a value-based pricing system, as implemented at Cabela’s, offers an optimal strategy that meet both customer expectations and company requirements.
This case arose when I went out of town on my first business trip. I have been a sales trainee for the last six weeks, and my supervisor felt it was time to send me out. I was lucky enough to get sent with the number one sales rep for the company, Vince Collier. I was excited because I knew that if I was going to learn the best ways to make a sale, it would be with Vince.
Price increases in the raw material mean that prices needed to be increased, but customers were still willing to pay for a quality product.
The law of demand tells us that "Quantity demanded rises as price falls, other things constant, or alternatively, quantity demanded falls as price rises, other things constant (McGraw 2004). The XBOX 360 phenomenon that took place in 2005 is a good example of this economic principle at work. Microsoft's XBOX 360 gaming console was released into the U.S. market on November 22nd 2005. The release came after a great deal of advertising and media hype that ensured that the demand for the product would outweigh the supply. Quite simply, there were more consumers wanting to purchase the product than there was product available. The retail price for the gaming system with a hard drive was $399. Many consumers, however, paid a great deal more than the $399 sticker price to acquire the system. On the morning of the U.S. release, retailers across the nation sold out of the product within just a few hours of opening their doors to consumers. In the weeks that followed however, many consumers purchased the unit from sellers on on-line auction sites and even from individuals in parking lots for as much as $1500. The reason for this was that the supply was significantly less than the demand for the product. In some cases, parents who wanted to ensure that their children received and XBOX 360 for Christmas in 2005 were willing to pay well over retail for the hard-to-acquire system. In other cases, video gaming enthusiasts wanted to be among the first individuals to own and play the system. News reports across the nation showed footage of people lining up days ahead of November 22nd in order to secure a place in line at retailers that would have the product available on the release date.
Americans, as a whole, spent around $11.8 billion dollars on bottled water in 2012. (Boesler)
Environmental Studies is the academic field, which systematically studies human interaction with the environment in which we live in. It is a broad field of study that includes the natural environment, built environment, and the sets of relationships between them. Environmental studies takes into account many different factors that help provide an enjoyable, fruitful way of life, such as national policies, politics, laws, economics, sociology and other social aspects, planning, pollution control, natural resources, and the interactions of human beings and nature.
This would handicap low income residents and independent farmers when trying to pay their water bills. Larger farming monopolies such as Monsanto would be able to afford the higher price, and buy out other farming competition. In addition, larger monopolies do not have the incentive to switch over to water conserving irrigation techniques, leading them to rely on independent less regulated wells in addition to the water the state designates for them. Excessive groundwater pumping could further decrease the water table level, cause more ground level subsidence, saltwater intrusion, increase drought in neighboring areas, increases risk for sinkholes, and cause a deficiency of groundwater available to surrounding farms and communities. If it reached an extreme enough level, they could be investigated for an environmental justice infringement for damages to the environment as well as abusing the shared natural
This forced people unable to acquire their water from local sources to buy cisterns. The other problem is that the privatized water company’s prices needed to be checked by other competing companies and or paired with strict regulations by the government. Since neither happened, the company impoverished already poor communities and competing companies did not drive the price down, because there were no other companies. Whether or not we are receiving our water from private corporations, municipal supplies, or our local co-operative, governments must have a strict plan to regulate the
1. What is a price taker? Discuss the assumptions that are made in order to obtain the perfectly competitive model.
Background. In an effort to limit waste, the State Park Service (SPS) allowed individual state parks the choice to place a ban on the sales of non-reusable bottles within their parks. Such parks would, instead, provide water refill stations. Consequently, the International Bottled Water Association (IBWA) has protested the change and is currently supporting a bill that would cut funding going to the new refill stations, and prohibit the SPS from putting any taxpayer
Starbucks is a front-runner in the coffee market of today. They are known for their delicious coffee drinks and teas, but they are also known for their high prices. Yet, Starbucks is still one of the top coffee distributors in America. According to USA TODAY, “some 30 million customers visit Starbucks nationwide each week, shelling out $3.50 – $4.00 per trip, on average”. They continue to explain how “Starbucks makes it seem so normal to pay this price for a cup of coffee”. With their prices already on the more expensive side, people will now be pulling an extra eleven cents out of their pocket for their famous cup of joe. It doesn’t seem like a lot now, but eventually that extra change will add up. Why does Starbucks need to raise their ALREADY high prices?
Price gouging is a very tricky to figure out if it should be legal or not. When the topic was first brought up I was unsure of my opinion. But after reading the articles, watching the videos, and the class discussion I have come to a decision. I think price gouging should be legal but it is morally wrong. If there was a natural disaster and everyone needs gas but there is a shortage of it there becomes a problem. If the gas company continues to sell the gas at the same price everyone will be rushing to get it. This would cause people to fill their whole tank of gas instead of just taking what they need to get where they are going and making the lines be very long until they have no more gas. The company would also be losing out on money they
CBS News went undercover to investigate price discrimination due to gender. Not only are women paying more for retail ideas such as jeans, shoes, and personal care but also for services such as dry cleaning. Do not get me wrong, women’s clothing can be more expensive than a male’s, however routine services should be a flat rate to both genders. As of now there are no laws preventing this discrimination in retail therefore women’s products are getting taxed 1.5% more than men’s. I believe that companies think women are stupid and will not recognize that we are spending more money than we should be. I find it ironic that women are getting targeted to pay more for certain items and services when they get paid less at their work place.
There are times when events might compromise the local water supply. This can happen during disasters of numerous sorts. In these events, the supply of potable water is a necessity for the local community. However, even this only serves to illustrate the insanity of how the widespread marketing of bottled water has become a burden to society. Having worked for 17 years in emergency services, I have personally seen how much water an emergency management department must keep on hand for even small communities. The cost of this resource has become increasingly expensive for local governments due to the marketing campaign, and widespread popularity, of bottled water. If more people turned to tap water, the result would be lower taxes stemming from cheaper prices for emergency management
Not surprisingly, fares and price is one of the most critical attributes in buying products or services. Mostly fares are the key element towards satisfactions level of students towards rail transportation. Price fares play a vital role in the customer satisfaction because the charges of the product directly affect the customer, so if it is affordable then customers satisfy it and willing to purchase the product again and again in future （Gustafsson et al. 2005). Anderson et al.（1994）; Cronin et at.（2000） and Virvilaite（2008） studying price relationship with satisfaction scientists indicated that “the level of satisfaction, depends on service quality, price”. As consumers are now demanding higher quality in item than ever before (Leonard and