Ethical Implications of Pricing

Ethical Implications of Pricing
Student’s Name
Institutional Affiliation
Price Gouging
Product pricing is an important element in businesses for determining how well a commodity sells. Some ethical implications in pricing may include price fixing which involves setting anti-competitive prices, price discrimination which can be direct or indirect, and monopoly gouging (Froeb, et all 2016). Other implications involve price cutting or price rise to increase profit and revenue margins by making more sales at a lower price per unit or fewer sales at a higher price per unit to reach the same goal.
Price gouging involves unfair price hikes resulting from increased demands instead of rises in supplier costs. Natural disasters are common in the country, and often retailers overprice some commodities such as water and other basic products due to increased demand resulting from the disaster. Beggs (2018) indicate that an increase in demand results in temporary shortage and supplier and retailer knowledge of higher demand may raise prices and restock or produce more to balance demand and supply. I have been a victim of price gouging mostly during catastrophes where basic commodities are overpriced.
Pricing becomes price gouging when suppliers and retailers raise product prices unfairly as a response t increased demand in the market. This occurrence often occurs during crises where unfavorable situation shoots up demand for particular products. For instance, hurricane or wildfires may result in communities being unable to access food, water and some protective gears such as raincoats resulting in hiked prices in regions where they are available.

Increased demand for such products in the region prompts retailers to raise prices, a move in reality that reflects retailers as taking advantage of desperate moments. In this scenario, the suppliers have not increased prices due to the cost of production, but retailers opt to make more profits due to increased demand. In essence, however, increased prices help control shortages by partly reducing demand.
References
Beggs, J. (2018). The Economics of Price Gouging. Thought Co.
https://www.thoughtco.com/the-economics-of-price-gouging-1146931Froeb, L., McCann, B., Shor, M., & Ward, M. (2016). Managerial Economics: A Problem
Solving Approach. Cengage Learning.