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Pandemic Pricing: Why Prices Need to Rise During Emergencies

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Published October 6, 2020

During emergencies, increased demand for goods and services often causes prices to rise. Though they may seem cruel, higher prices discourage hoarding and encourage manufacturers to increase production. Price controls that stop the prices of essential products from rising in emergencies lead to shortages that leave everyone worse off.

Discussion Questions:

  1. What are some examples of markets in which price controls have failed?
  2. How do supply and demand influence prices?

Additional Resources:

  • Read “Price Gouging Could Actually Fix Our Face Mask Shortage,” by Russ Roberts via Marker. Available here.
  • Listen to “The Price of Everything,” with Russ Roberts via EconTalk. Available here.
  • Listen to Russ Robert discuss propane price gouging on the Charlie Brennan show. Available here.