Question

Q) What is price gouging? Is it illegal for a company to sell a product for a high price that a consumer is willing to pay?

Please feel free to draw any graphs or cite any references as and when needed

Answer 1

Q : Answer :-

*Definition :

Price Gouging Occur When Price Of Goods is Much higher Than What Its Regular Price For The Product. It Is Occur When Demand And Price Of Goods Is Higher Than Usual And People Want More And More Supply For That Product. So the Result Of That Kind Of Demand And Supple Increase Its Price In The Market. This Kind Of Price Gouging Is Exist In Some Natural Disaster Or Some emergency Situation.

* Legal ​​​​Or Illegal :

In Price Gouging Seller Sell Their Product In Maximum Price So Is Not Good For Consumer at All. So Price Gouging Is Illegal it Is A Exploitation Of Consumer And Unethical. Doing Price Gouging During Emergency is A Crime. In The United State Their Are Law For Price Gouging In Constitution.When People.Experience That kind Of Price Gouging They Have To Complain It and Their Are Provision Of Punishment For This Kind Of Crime.

In US their Are Provision For Price Gouging.

(1) During Emergency Price Gouging is Prohibited To Protect Consumer During That Situation

(2)Seller Can't Sell Its Product Much Higher Price Than Regular Price For The Product

(3)Price Gouging Is Stickily Prohibited For Essential Items Which Is Necessary For Living.

=» Graph For Price Gouging

In The Above Graph We Should See That When Demand And Supply For Product Is Increase So First Price is P1 And After The Increase In Demand And Supply Price Goes to P2 So Price Is Higher Then Usual

So Their Are Many Laws To Protect Consumer From Price Gouging During Emergency Situation Like Recent Covid -19. Government Made Some Provision To Restrict It For Ease Of Living During Emergency Situation.