I live just steps away from the Exxon station on Lane. When I’m not in the mood to drive to the grocery store I just walk out my door and get what I need at Exxon. I know that Exxon jacks up the prices for goods because they know people like me will be pay for them because it’s convenient. This jacking up of prices higher than what’s reasonable is called price gouging. Price gouging happens everywhere but is more common on university campuses. For example, a 20 pack of solo cups at this Exxon is slightly over $3. If you were to go to Target, you could get a 50 pack of these same cups for the same price. Exxon knows students aren’t going to go to Target to get cups on a Friday night after they’ve already had a few and decide it would be fun to play beer pong. Another example of price gouging on campuses is campus bookstores charging absurd amounts for textbooks. Bookstores know students value their grades enough to spend this kind of money on a book that we can barely understand. These two examples are ones that I’ve come across on campus but there are price gouging problems across the U.S. on a much higher level. When a natural disaster happens and thousands of people lose their things, there is a drastic increase in demand. The sellers of common items needed by disaster victims are aware that people value these supplies much more now. The more they value the supplies, the more they are willing to pay for them. One example, in which I believe was used in lecture, is a person buying generators in bulk and reselling them at a much higher price. Some sort of natural disaster hit this area and this person thought the demand for generators will significantly increase. When the quantity demanded increased, the equilibrium price and value of these generators increased as well. I don’t recall the exact price people were willing to pay but I would imagine it would be at least 3 to 4 times more than the original buying price. If I remember right this is illegal but if I am incorrect and it actually isn’t illegal it definitely should be. I hope I didn’t confuse anybody with that last sentence. Price gouging is bad.
Ryan W
T R 8:00
I like this, never really thought of it that way. Makes sense though.
ReplyDeleteI completely agree with you that price gouging is bad, however a gas station is there for convenience and is more individual size. Buying in bulk from a place like target or better yet sam's club is going to be cheaper, that's what those places are there for. A gas station is more like a small business (as far as a store goes) trying to make it with the big ones so although the prices are a bit ridiculous they have to be higher to keep the cost of having those items on the shelf manageable.
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