Hurricanes hit the income of people. At the same time, it also destroys the supplies of...

Hurricanes hit the income of people. At the same time, it also destroys the supplies of essential commodities causing sharp increases in prices of essential commodities. The local regulator suggests a price control on essential commodities. Do you agree or disagree? Briefly explain.

Expert Solution

Price gouging is a problem which generally comes with a demand shock or supply shock. When a natural disaster is happening, it's after effects involves higher demand and lower supply of commodities.
Many states have already gone for anti-gouging laws during a natural disaster. This has both positive and negative effects. While regulating price gouging, many times customers are tend to accumulate almost everything they can buy. This will hamper other customers' purchasing power.
Anti price gouging laws will regulate the prices of commodities from going higher than the normal prices. During such a situation whoever comes first can afford to buy most of the commodities. This will create a shortage of items and will induce a price gouging in black market. Elderly people are mostly affected during such situations.
When a price control is not in the market, then it may cause an uncontrollable increase in price of commodities. This can include emergency/essential commodities as well. In such a situation people who are not having the purchasing power cannot afford to pay and people who are leading a comparatively better life can afford them.
Both the scenarios tend to cause inequality in supply of goods. Even though the demand is high, price determination has greater role in resolving the problem.
In my view, there shall be price control for drugs and other emergency services, whereas no control over the price of commonly available commodities. Another option is to provide vouchers as per ration basis to all the families in a moderate price and rest of the price can be market determined.

Rahul Sunny answered 5 months ago

In a 22-year period, a particular location was hit by 38 major hurricanes. Assume that major...

In a 22-year period, a particular location was hit by 38 major hurricanes. Assume that major hurricanes are independent of each other and that the mean number of hurricanes per year has not changed. a) What's the probability of no hurricanes next year? b) What's the probability that during the next year, there is exactly one hurricane? c) What's the probability that during the next year, there is more than one hurricane?

Hurricanes hit the United States often and hard, causing some loss of life and enormous economic...

Hurricanes hit the United States often and hard, causing some loss of life and enormous economic costs. They are ranked in severity by the Saffir-Simpson scale, which ranges from Category 1 to Category 5, with 5 being the worst. In some years, as many as three hurricanes that rate a Category 3 or higher hit the US coastline. In other years, no hurricane of this severity hits the United States. The following table lists the number of ears that had...

We have witnessed a number of devastating hurricanes hit USA specifically in Texas, Louisiana, Florida, Alabama,...

We have witnessed a number of devastating hurricanes hit USA specifically in Texas, Louisiana, Florida, Alabama, and Georgia. Thousands of families have had to leave their homes due to these natural disasters. In addition, these people have lost their houses, cars, and businesses. Consequently, many families have had to sleep in shelters and some have lost loved ones. Please be thorough and consider all aspects that may have affected these families. How will you help them? Describing your plan as...

Jonesboro City suffered severe structural damage after a hurricane hit August 10, 20x7. Hurricanes are common...

Jonesboro City suffered severe structural damage after a hurricane hit August 10, 20x7. Hurricanes are common in the area, but it had been a half of a century since the last hurricane hit. The building was purchased in 11 years earlier for $2 million and had accumulated depreciation of $600,000 as of June 20X7. An impairment loss of $190,000 was prepared during a cost analysis with the engineers. The city expects to receive recoveries from insurance claims of $90,000 for...

If income decreases and, at the same time, a new technology is discovered that lowers the...

If income decreases and, at the same time, a new technology is discovered that lowers the cost of producing the good, which of the following will happen?

Is it possible for a company to have negative net income but at the same time...

Is it possible for a company to have negative net income but at the same time a positive cash flow? Please explain why in detail and provide an example.

Question 4: People decide how to “budget” their time in much the same way that they...

Question 4: People decide how to “budget” their time in much the same way that they decide how to budget for different goods. Each person decides how much they “value” their leisure time versus their work time. The more people work, the more they tend to value their remaining leisure time. This is the justification for paying overtime to people working over 40 hours per week. How might we model this trade-off economically using the basic labor supply model by...

Four people working independently on an assembly line all perform the same task. The time (in...

Four people working independently on an assembly line all perform the same task. The time (in minutes) to complete this task for person i, for i=1,2,3,4, has a uniform distribution on the interval [0, i]. Suppose each person begins the task at the same time. a) What is the probability that person 2 takes less than 90 seconds to complete the task? b) What is the average completion time for each person? c) What is the probability that all four...

People have build homes in Florida in areas that experience hurricanes. Californians build in areas vulnerable...

People have build homes in Florida in areas that experience hurricanes. Californians build in areas vulnerable to earthquakes and forest fires. Should the government make insurance companies provide insurance to these homeowners? Why or why not?

The following income statement was prepared for Frame Supplies for Year 1: FRAME SUPPLIES Income Statement...

The following income statement was prepared for Frame Supplies for Year 1: FRAME SUPPLIES Income Statement For the Year Ended December 31, Year 1 Sales $ 76,550 Cost of goods sold (36,830 ) Gross margin 39,720 Operating expenses (9,240 ) Net income $ 30,480 During the year-end audit, the following errors were discovered: A $1,574 payment for repairs was erroneously charged to the Cost of Goods Sold account. (Assume that the perpetual inventory system is used.) Sales to customers for...

Question