Ethics of Price Gouging

This is a short but interesting discussion to think about. Price gouging happens when companies/oligopolies raise prices when demand for a certain product increases due to weird circumstances. (One example in mind right now would be the demand for hand sanitizer). On one hand, you may think how this is completely normal in economic theory and prices should go higher as demand increases, but a lot of people think it's immoral/unethical.

Even though price gouging is context specific, generally; I would say that it is unfair to those of lower socioeconomic status. Like if the demand and prices increase so much that most people wouldn't be able to afford them, I don't believe that it is fair. Emergency price surges have the worst effect on poor individuals and families who are already the most vulnerable during crisis situations. Some might say that this is normal, and because of the increase in prices, the demand would decrease. But what if it doesn't? And even if the eventually drops, what about all that money the companies made by price gouging their products? Again, it is very context specific, I'm interested in what the class has to say about it.

If we add another aspect to it, people would say that anti-price gouging laws are more harmful because they create shortages. As demand increases and prices stay the same, you would eventually end up with no more of the product (like hand sanitizer). Prices for hand sanitizer and toilet paper have gone up in order to prevent people from buying too much of it. But in some cases when it comes to "necessities," it feels unfair to be gouging prices during emergency times. Again, having too many anti-price gouging laws creates shortages (Silicon Valley housing) and there should be some alternative to oversee the benefit of the economy, as well as keep things fair for individuals.