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Essay Available:
Pages:
2 pages/≈550 words
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2 Sources
Style:
APA
Subject:
Business & Marketing
Type:
Essay
Language:
English (U.S.)
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MS Word
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Topic:

Principle-based Ethics: Price Gouging

Essay Instructions:

Assignment Overview
Natural Disaster and the Retail Business Owner
In the aftermath of Hurricane Sandy, which hit the greater New York area in November 2012, the news was full of examples of price gouging—gasoline for $4 per gallon, a loaf of bread for $7, double rates for motel rooms, and on and on. This is a frequent response by retailers in the wake of natural disasters. The retailers involved (and not a few economists) argue that raising prices is a natural response to supply shortages and it is their right as business owners or managers to set their prices at levels that serve their interests. Many others (including politicians who favor laws against price gouging in such situations) take a dim view of what they see as taking advantage of consumers caught in vulnerable circumstances where choices for needed products and services are few. What do you think?
Case Assignment
Read the background material in the Presentations file for this module(which I have in a word doc, but need to send to someone) and Futrelle, D. (2012). Post-Sandy price gouging: Economically sound, ethically dubious. Time (November 2). Retrieved March 31, 2014, from http://business(dot)time(dot)com/2012/11/02/post-sandy-price-gouging-economically-sound-ethically-dubious/
Then search the Internet for examples of price gouging. Apply that material to the pricing decisions discussed in this Case in answering the following questions:
1.What ethical principles support, respectively, raising prices in the wake of natural disasters and opposition to such increases?
2.Which approach would you advise a convenience store owner to follow in an area hit by a tornado or hurricane?
Write a 2- to 3-page paper (not counting cover and reference pages) explaining your analysis and advice. Reference any sources of information about normative ethics principles and give relevant examples.
Assignment Expectations
•Your paper should be double-spaced and in 12-point type size.
•Your paper should have a separate cover page and a separate reference page containing the full citations corresponding to the in-text citations you choose to use in the body of your paper.
•Cite sources of information in your text.
•Proofread your paper before submitting it.

Essay Sample Content Preview:

Price Gouging
Name:
Institution:
Introduction
In capitalist economy, the demand and supply of goods play a major role in the regulation of the prices that the customers are bound to pay for their goods or the services they seek. As such, whenever the supply of a commodity goes down for whatever reason, the demand is set to go higher in a normal market. This is ideally triggered by the fact that there aren’t enough commodities to go around. This is the same case that follows whenever there is a calamity. It is the ethical basis of the aspect that is much more intriguing than the economic aspects. However the two seem to have an inseparable band that most traders prey on whenever there is a shortage of the commodities that they are offering despite the circumstances surrounding the shortage.
Justification of price gouging
Price gouging is an aspect that plagued capitalist societies for quite some time and there seems to be no end in sight. As pointed earlier, in a free market as is the case with most capitalist economies, whenever there is a shortage of commodities; prices tend to shoot up relative to the low supply and high demand. Natural disasters or calamities bring about high demand for common commodities surpassing the supply. As such, it is always common to find that most of the traders find it natural to increase the prices to make hefty profits. Most traders will argue that, it is only natural to raise the prices relative to the market dynamics with close reference to the demand and supply of the goods.
The other ethical argument relates to the fact that, the laws banning price gouging are ill informed. Apparently, if there are no bans on the prices gouging, the consumers will better evaluate what they need most, while helping the traders better manage the inventories.It is also argued that the traders and the customers are mutually benefiting and thus it is not entirely exploitative. Ideally for businesses this is what makes perfect sense when evaluated with capitali...
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