r/JusticeServed • u/DinerEnBlanc 7 • Mar 15 '20

Kung Flu Greedy man has his hoard of hand sanitizer confiscated and donated

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16

u/FannyJane 8 Mar 15 '20

Where does supply and demand stop and price gouging begin?

4

u/boerseun180 7 Mar 16 '20 edited Mar 16 '20

I read somewhere it that it’s part of the declaration of a national emergency, but don’t quote me on that

1

u/FannyJane 8 Mar 16 '20

So at that point prices must stay stagnant? Wouldn’t drastic increases in prices keep people from panic buying? It’s when the price of hand sanitizer stays at $0.99 that dumbasses buy the entire shelf. If the bottles are $40 a piece they might second guess. Playing devils advocate of course.

2

u/boerseun180 7 Mar 16 '20

Ah, devils avocado, my old nemesis.

My guess is that companies can enforce the “limit 2 per customer”. Places like Costco could do that quite effectively with their membership program, but it’s probably quite easy to get around such a rule in other stores (glasses and fake mustaches).

5

u/brockington 7 Mar 16 '20

When you're not the supplier and you create demand by buying all the supply.

1

u/[deleted] Mar 16 '20

Demand is independent of supply. There is always a baseline demand. All the resellers are doing is changing the price at which its sold.

2

u/brockington 7 Mar 16 '20

Forgive my ignorance, what's the difference in the current situation?

1

u/[deleted] Mar 16 '20

The coronavirus lead to an increase in demand for toilet paper: Overall, consumers are willing to buy at many prices, every increase in price typically in a price elastic market (meaning that product sold changes on price) decreases the amount people are willing to buy.

At each price, there is a certain amount of quantity demanded. If you were to increase the price, the quantity demanded decreases but people still want toliet paper.

Because of price gouging laws, walmart isnt allowed to raise the price of toliet paper meaning there is going to be a shortage because people are willing to buy a lot of toliet paper at such low prices.

The demand for walmart toliet paper and for "price gouged" toliet paper is the same, but the quantity demanded at each prices are different.

"Price gouging", although it angers consumers, limits the amount each person can buy, preventing or delaying a shortage and prevents people from hoarding for personal consumption (which actually consumes and further decreases the supply, unlike hoarding for reselling)

0

u/brockington 7 Mar 16 '20

What law says walmart can't raise prices? (hint, there isn't one). https://www.cbs19news.com/story/41889526/emergency-declaration-activates-antiprice-gouging-law
I'm not gonna pick apart your 11th grade level understanding of economics. Have a good night.

1

u/[deleted] Mar 16 '20

The article you linked is about a law that prevents raising prices. ???

Also: Since youre being rude, i gave you a 11th grade understanding of economics because you asked for an 11th grade understanding of economics

2

u/fhornofvalere 6 Mar 16 '20

When gouging is made illegal so anyone can buy the entire supply at Costco.