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
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.
Americans, as a whole, spent around $11.8 billion dollars on bottled water in 2012. (Boesler)
Price increases in the raw material mean that prices needed to be increased, but customers were still willing to pay for a quality product.
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
Even though their price raised about 500% there is still no law to bring them to court since the pharmaceutical side of business is allowed to increase the price as much as they want. Most states however, have their own price gouging regulations under their own state law. Although some of these state specifically state as to which product is not allowed to price gouge, some states like Virginia on any necessary goods and services (Gilberson, 2012). Having about 35 states create regulations about price gouging prove this influx in price is a huge issue when it comes to the American public’s necessities in which all people should be able to
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.
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.
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
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?
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
In a market there can be many types of pricing strategies. Some of these include: average pricing, marginal cost pricing, penetration pricing, skimming price, price discrimination, cost plus pricing, kinked price among others. Most of these strategies are based on the aim of profit maximisation. The pricing strategy differs under the different market structures like perfect competition, monopolistic competition, oligopoly and monopoly.
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
Wyler, Grace. "All Around The US, Risks Of A Water Crisis Are Much Bigger Than People Realize." N.p., 22 May 2013. Web. 14 June 2014.