ECO 201 Chapter Notes - Chapter 11: Price Gouging, Marginal Cost
Document Summary
Subsidy: payment made by the government to a producer. +fall in price and increases in quantity produced. When a good is illegal the cost of trading in the good increases. There is no federal law for price gouging. New bill defines gouging as excessively unconsciouslnable price increase . +new price would have to mount to a gross disparity with usually price for it to be gouging. Twenty eight states have emergency price gouging laws. This emphasizes collusion as a part of gouging. Some argue that collusion isn"t necessary for gouging to exist. The united states is the world"s largest cotton producer. The united states and brazil are at war over cotton. Brazil is angry that american farmers get subsidized because they say it prevents the market from being competitive. Brazil sued through the world trade organization and won but nothing has changed.
