What is price gouging?

• A. Price gouging is the practice of increasing the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair after natural disasters.
• B. Price gouging is the practice of lowering prices after disasters
• C. Price gouging is the practice of rationing goods after disasters
• D. Price gouging is the practice of price discrimination across customers

Answer: (A)

Price gouging refers to raising the prices of essential goods and services to levels considered excessively high after a disaster or emergency, when people have urgent needs and few alternatives. The idea is that with disrupted supply and spike in demand, some sellers exploit the situation by charging far more than what would be reasonable in normal times. This behavior is often subjected to laws or regulations that limit price increases during emergencies to protect consumers.

Why the other ideas don’t fit: lowering prices after disasters would help consumers rather than hurting them; rationing is about controlling how much of a good each person can buy, not about boosting prices; price discrimination means charging different prices to different customers, which isn’t inherently tied to the emergency context or to unusually high price levels.