Comment on why anti-gouging laws can increase social welfare.

A. Penalties assessed on price gougers can be redistributed to victims or the area at large that was affected by natural disaster. In that sense, the government wants more illegal price gouging to occur so it can prosecute and raise more revenue in fines and redistribute to voters.

B. They reduce the availability of supplies to rich people, which helps to smooth out income inequality.

C. They make products affordable for people who cannot pay the "gouge" price, and they are a solution for traumatic situations where new suppliers cannot enter because of physical restraints from the natural disster.

D. Legislators and regulators benefit by making pronouncements against price gougers, knowing the public holds such a low opinion of them (the gougers, not the politicians). The public sees swift action against profiteers, and legislators/regulators enhance their standing in the public eye.

Answer rating: 100% (QA)

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