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Using Price Gouging

Price Gouging

The term price gouging can be used in multiple ways. It is used by consumers to complain about merchants gouging prices, or raising the prices on products unreasonably high. Price gouging can also be used in a legal sense. Merchants gouging prices on items that are in short supply during times of emergency is illegal in most countries.

There are no laws against the casual price gouging that may occur. While consumers may feel that gouging prices is unfair, the free market system that is used in the United States has made it illegal for the Government to demand that merchants keep their prices below a certain amount.

People can choose to not purchase any items in a store that is gouging prices, but there is no legal action they can take. Merchants will usually gouge prices on things when the supply of those items are limited. Another common reason why a merchant may get away with price gouging is because of their store's location. Amusement parks and airports are two places where merchants are known for price gouging. This is because any individual that needs to purchase something in one of those two places will not be able to quickly run to another, cheaper store.

The store with the high prices is usually the only one around. Any other nearby shop or store will usually have the same price gouging method. Because of this, individuals are forced to pay high prices on items that they feel are much more reasonably priced in a different location.

Casual price gouging is usually less common in areas where there are many stores to choose from. The added competition may force a store to lower the prices of their merchandise instead of gouging prices to keep up with the competition.

Illegal price gouging is very different. Gouging prices on items during times of natural disaster such as a flood or hurricane is illegal. A merchant is breaking the law if he raises the prices of his goods during this time. The prices that were charged for the goods before the disaster must remain the same when an area is in a state of emergency.

A typical reason for price gouging in general is when things are in short supply. However, even though every product may be highly in demand, merchants must keep their prices the same during a state of emergency. In most countries, it is illegal for any price gouging to take place during a state of emergency. It is also considered to be morally wrong.

While both types of price gouging may seem unfair to consumers, only one kind of price gouging is illegal. The Government can step in to stop the merchants from gouging prices during times of emergency, but due to the free market system used in America, there is nothing that can be done about regular price gouging.

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