Price gouging is not cool - but how does a business curb demand when they have a limited supply? If they don’t curb demand the supply will reach zero fast.
The example I’ve seen used with Uber price gouging is this: suppose there is very high demand for Uber in NYC. If they don’t raise prices, all drivers will be occupied. The pregnant woman who’s about to deliver won’t make it because there’s zero supply. If they hike prices, yes she will have to pay a lot for her Uber - but it’s better than nothing.
Communication may have solved this I supposed. Make customers aware that prices will surge before they surge.
Price gouging is not cool - but how does a business curb demand when they have a limited supply? If they don’t curb demand the supply will reach zero fast.
The example I’ve seen used with Uber price gouging is this: suppose there is very high demand for Uber in NYC. If they don’t raise prices, all drivers will be occupied. The pregnant woman who’s about to deliver won’t make it because there’s zero supply. If they hike prices, yes she will have to pay a lot for her Uber - but it’s better than nothing.
Communication may have solved this I supposed. Make customers aware that prices will surge before they surge.