So after a hurricane or tornado it is okay if a gas station chooses to charge $20 per gallon because they have it you need it, and the fact there are only limited places to get it has nothing to do with it.
And hate to tell you but not all economist agree with you,
By your definition the free market can rise up and remove the owner and take the gas, because the market wants it, he has it and because the government should say out of it, taking it is perfectly acceptable free market reaction.
Sure he offered it at $20 per gallon, but me and the "market" (the 100 people in line) decided we weren't gonna pay for it at all.
Frank,
Respectfully, It is Ok for them to charge whatever they want. Ignoring the fact that the markets should be able to operate freely, There are very good reasons why a station should and be able to rasie their prices. Lets use a hurricane as an example.
1. After the event, supply is most likley going to be an issue. With a reduction of the supply, you cannot assume the same supply/demand is in effect. Now the gas station owner does not know when or how much he will get in his next fuel delivery, if he gets one. If he keeps the prices the same, then he will sell out quickly. All things being equal, he will get cleaned out quick. That does not take into account people who will go and buy large ammounts to hedge against long supply issues. Since he is now sold out, people who really need fuel are up shits creek.
2. If he were to raise his prices from $5 to $20 a gallon, he would signal that the supply is not meeting demand. It would ensure that people who REALLY need gas and are willing to pay $20/g are still able to purchase it. It keeps people who just want to stock up (rings a bell with pmags?) from buying up the stock and either hoarding or reselling at a higher price for their own personal profit.
3. The business owner is there to make money, plain and simple. Profit idealy is correlated to risk and exposure + labor. If it was my gas station, and the state/gov told me I had to continue selling my gas at artificaly lower prices, with no certaintly of a resupply, and considering the fact that my area was just devistated, I would close the doors. Why would I Buy a generator, pay for fuel to run it, run a shop while my family is home without power/water/gas/ect, so I can sell people who did not prepare cheap fuel after the fact? Piss on that.
4. If he prices his fuel above what people are willing to pay, he assumes the burden that he won't sell it. His price will adjust based on demand as it does in every industry within a free market. We do not need the government to interfere with free commerce and transactions where both parties are willing participants. EVERY price control measure by the government has either had a negitive net effect to that system or unintended consequences that any price saving for you, pale in compariosn.
5. I have no idea what you are talking about when you say rise up and take the gas from the owner. That is both illegal and exactly what the free market is against. No where did anyone say anything about stealing, as that is similar to what the government is doing when they place price controls on somone. So are you saying that becuse 100 pissed off people want shit for cheap, that the owner should just pander to them? Not sure what you are saying here.
The same ideas translate to any product or service. Would you rather buy a $100 bottle of water while you are dying of thirst or all the Sold out $1 bottles?
One last point, Just beacuse you "need" something, does not make you entitled to it. If you "Need" it then you should have either prepared or been willing to pay the current market value for it. Needs and wants are very different.