New York AG Warns of Price Gouging on Masks Amid Air Quality Issues

Consumers are purchasing facemasks, air purifiers, and air filters as smoke drifts over New York from Canada’s wildfires. As demand rises, New York’s Attorney General is warning consumers to be wary of price gouging. New York law prohibits businesses from selling vital goods for an excessive price during emergencies.—usatoday.com

Answer the following questions to check your understanding of the story.

Does the New York law on price gouging achieve an efficient outcome?

a) Yes because vital goods will be allocated by a method other than market price.

b) No because consumers want to buy more vital goods at the lower price created by the law than are available.

c) Yes because all consumers can buy vital goods during the emergency at the price that prevailed before the emergency.

d) No because the law will create a surplus of vital goods.

Who benefits from the New York law prohibiting businesses from selling vital goods for an excessive price during emergencies?

a) all consumers

b) sellers because they retain the goodwill of their customers

c) consumers who can find and buy vital goods at the pre-emergency price

d) poor people who can’t afford to pay an excessive price

New York AG Warns of Price Gouging on Masks Amid Air Quality Issues

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