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| Originally Posted by Unregistered I always wondered if the radical price increases for rental cars between Christmas and New Years would qualify as price gouging. The State of Florida has all kinds of laws set up for things like selling ice at $5 a bag after a hurricane, etc. If I remember correctly the law is something like you can not dramatically increase prices for short term profits. Any thoughts on this? Would this be worth reporting to the Attorney General? |
I don't really have a problem with this. In economics, it's called "temporal price discrimination". Good examples are hotels charging more in the high season and less in the off-season, movie theaters offering bargain matinees, or Enterprise offering a $9.99 weekend special. Demand is much higher during the week of Christmas through New Year's, so you'd expect prices to be higher.
Actually, allowing prices to rise during hurricanes has several positive social benefits also, including:
1. Encouraging suppliers from surrounding areas to rush needed supplies to the affected area.
2. Encouraging efficient use of scarce resources.
3. Encouragaing people to plan ahead by stocking up on emergency supplies.
Prices provide a very important signal and encourage all sorts of socially beneficial behavior. There's a four thousand year history of price controls leading to shortages, which is the last thing you'd want after a hurricane.
It's fraud or bait-and-switch that bothers me, not adjusting prices because of changing demand.
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