Price Gouging

Price gouging, in my opinion, is unfair and unreasonable. For example, a hurricane to hits Pinellas County. All of the water, electricity, and housing are damaged or turned off. The only supplies that people have are ones they stocked up on. A company selling water, food, blankets, etc. comes into town. This company decides to make a gallon of water six dollars, blanket twenty dollars, and a loaf of bread eight dollars. The company feels that this is reasonable.

So along with the high prices, they give you an explanation. This explanation is that the risk of coming to such a desperate region is included in the price of the goods. This explanation, to the people, would seem like a cope out because it is. They would see their situation as a time of giving, not profiting. It is hard to see where the company is coming from when they raise the prices of all the goods they are supplying.

With this supply, they should see that they people have nothing. There houses have been waterlogged and their belongs swept out with the water. They don’t have the kind of money to buy the things they need to survive this disaster. Price gouging allows the company to profit off of desperate people that need the supplies to live. All in all, price gouging allows company to have an unfair advantage and profit off the distressed.

Specialization

Imagine Company A only mows lawns and Company B mows lawns, trims flower beds, and cuts down trees. Company A would have some advantages and disadvantages to only doing one service, where company B would also have advantages and disadvantages. Specialization is when a company only supplies one good or service, such as Starbucks coffee. Specialization has pros and cons and, using the lawn example, I will demonstrate these.

First, Company A would have an advantage over Company B because they could spend all their money on only mowing equipment, getting the best equipment out there. They would also be able to perfect the “art” of mowing lawns and become quicker and more efficient on the mower. Along with these advantages they would also have disadvantages over Company B. Company A would only be able to mow lawns no other yard work, which would cause them to lose clients and not be able to offer the whole package of lawn service.

On the other hand, Company B would be able to take those clients and give them all the service they need. Their advantage would be that they have all the tools to do all the yard work. Company B also has disadvantages of being able to “do it all”. They would have to spread their money out and not get the best equipment out there. They would also have to concentrate on different aspects of the job taking away of perfecting one thing. Both companies would work for getting your grass cut but, which one would you choose?