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What is Price Gouging?

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Price gouging is a negative term to describe high prices in response to a shortage, sudden increase in demand or situation such as an emergency. This is widely viewed as unethical and can be detrimental to a brand. Price gouging is prohibited by law in some circumstances.


The term price gouging is often used to describe prices that are spiked unreasonably high simply because customers are stuck at a particular location such as an airport, event or remote area. In this case, price gouging is possible because a seller has a monopoly. For example, the only coffee shop at an airport may charge high prices because there is no other way for customers to get fresh coffee.


If a toy is popular at Christmas resulting in a shortage, some customers may be willing to pay exorbitant prices. In some cases, large retailers aren't aggressive about raising prices in this circumstance as it's viewed as detrimental to their brand.


If a global supply chain shock causes a shortage of a food item or product, retailers may be tempted to dramatically hike prices on their remaining stock.

Disasters, Wars and Emergencies

In many cases, it is prohibited by law to hike prices in response to a disaster, act of war or emergency.
Overview: Price Gouging
Business Law
A negative term to describe high prices in response to a shortage, sudden increase in demand or situation such as a disaster.
Related Concepts


This is the complete list of articles we have written about pricing.
Algorithmic Pricing
Bargaining Power
Benchmark Price
Price Fixing
Cost-plus Pricing
Price Gouging
Customary Pricing
Decoy Effect
Everyday Low Price
Marginal Utility
Willingness To Pay
Dynamic Pricing
High-Low Pricing
Market Value
Flat Pricing
Loss Leader
Predatory Pricing
Price Discrimination
Snob Effect
Market Price
Price Competition
Price Leadership
Premium Pricing
Price Economics
Price War
Revenue Management
Veblen Goods
Price Floor
Price Promotion
Price Sensitivity
Price Skimming
Price Umbrella
Pricing Power
Pricing Strategy
Sticky Prices
Value For Money
More ...
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