During times of crisis, retail stores tend to increase their prices which some consumers may consider price-gouging. To protect its people and consumers, Florida has created an anti-price gouging law. This prevents distributors and dealers from taking advantage of their products' needs and increasing their goods' prices.
However, economists say the anti-price gouging law does not benefit consumers as they want to believe. Prices of goods at a certain point are supposed to send a message to both consumers and suppliers.
When price increase is prevented, people tend to buy more than they need and hoard items because they know there will be a shortage of supplies. And those that would have bought items while there is supply tend to sell to those who have nothing to buy at prices much higher than they purchased.
This scenario encourages illegal markets to emerge. So consumers still tend to pay higher prices. Should the government allow the normal price system to come into play, suppliers can produce more products because of the increase in the profit they get for the products, and people do not end up scrambling for resources that otherwise would’ve gone scarce.
The purchasing behavior also changes as those who don’t need a certain product wouldn’t buy it due to the price increase and, as a result, allow the person who needs it and is willing to pay more for it to make the purchase.
These anti-price gouging laws lead to supplies not meeting actual demands and encourage monied consumers to exploit and take advantage of the resource-deprived. Florida should not crack down even further on price-gouging.