Article One: Price Increases after Disasters

In the second paragraph, the article indicates that price gouging during times of disasters is a significant threat. Both the Left and the Right politicians agree that there are inflations and increase in the price of essential commodities during disasters. The article further notes that the need to counter the negative impacts has forced some states such as New Jersey to impose penalties on price gouging. There is also the indication of efforts such as the creation of hotlines that have been put in place to address the effects (John, 2014).

In the graph below, it is evident that a shift in the price level affects both the demand and supply levels. During the time of emergencies, inflation is common thus triggering an increase in the price of commodities. According to the law of demand and supply, when all factors remain constant, an increase in the price level will lower demand, while a reduction in the price level will increase demand.

Article Two: The Problem with Price Gouging Laws

Rafi Muhammad in the article “The Problem with Price Gouging Laws” indicates that there are adverse impacts that come with price gouging. Other than encouraging hoarding, it also discourages business operations from increasing business supplies. In the tenth paragraph, the author focuses on some of the interventions that are put in place by the government to deal with price gouging during emergencies (Rafi, 2013). Subsidies and other price policies help price in check thus minimizing possible exploitation of consumers. During inflation, only persons with enough money are in a position to buy commodities in the market.

References

John Camry (2014) Price Increases after Disasters:  Is price gouging reverse looting?

Rafi Mohammed July 23, 2013, The Problem with Price Gouging Laws

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