How Price “Gouging” Can Help Us

99 cents prices
Comments (2)
  1. Rick Shapiro says:

    The upside of price gouging is not as evident as you might think from econ101. In the face of even partial monopolies, a price cap can actually increase supply. Monopolies in America accumulate not only from the disgraceful Posner-inspired abandonment of vigorous anti-trust, but also from economic inertia in sudden black swan shocks (like a disaster).
    Of course, in the very long run, econ101 rules, because barriers to entry will eventually erode. But a linear very long run doesn’t exist in chaotic systems like economies. As Keynes said, in the long run, we are all dead.

    1. Elaine Schwartz says:

      Thanks, Rick!

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