Discuss how price gouging might lead to pareto improvements
Course:- Business Economics
Reference No.:- EM13981109

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Economic Efficiency

Shortages of resources such as water, food, and building supplies are a problem many communities face after a natural disaster occurs. Some communities have even enacted laws to prevent “price gouging,” the practice of asking very high prices for products in short supply after a natural disaster.

Discuss how “price gouging” might lead to Pareto improvements.

Is legislation preventing price gouging fair? Is it a good idea?

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