Consumer advocate: Economists reason that price gouging-increasing the price of goods when no alternative seller is a...

on December 11, 2019

A

Why is A wrong?

3 Replies

Ben on December 13, 2019

Hi Tomgbean, thanks for the question.

It took me a little while to understand why A is incorrect. So I must say that this is a good question to examine.

I believe that A is incorrect because it is saying that the author is disputing one explanation in order to make way for another. But the author does not try to then explain why price gouging is efficient. Rather the author just states the effects of price gouging, namely that the rich will have access to goods.

Answer choice E is accurate because the argument assumes in the reasoning that it rejects, that the rationale behind price gouging as an indicator of need is underlied by an assumption that willingness to pay is proportional to need. It rejects this assumption.

I hope this helps. Please let me know if you have any other questions.

on December 14, 2019

Hi Ben. This was a tricky one. Thanks for the explanation.

Ravi on January 14, 2020

@tomgbean, let us know if you have any other questions!