Something Interesting - Why are we studying this? |
|
When a hurricane hits the coast of Florida, prices of many necessities like food, water, hotel rooms, gasoline, and even plywood, tend to increase. Some governments try to prevent such price increases and call them "price-gouging".See: http://www.csmonitor.com/1992/0910/10083.html
But economists think that such price increases are GOOD for the people ravaged by the hurricane. WHY? Why is it GOOD when the prices of products (like plywood) increase during a natural disaster?See: https://www.masterresource.org/price-gouging-law/defense-price-gouging/ANSWER: Allocative Efficiency |
|
|