Hit by a cascade of complaints from consumers, the New York Attorney General’s Office launched a probe on Monday into price gouging in the state in the wake of Hurricane Sandy.
The complaints centered on gas-price hikes but also include reports of jacked-up prices on everything from emergency supplies like generators to higher hotel rates and loftier prices for food and water.
“Our office has zero tolerance for price gouging," NY Attorney General Eric Schneiderman said in a statement. "We are actively investigating hundreds of complaints we've received from consumers of businesses preying on victims of Hurricane Sandy, and will do everything we can to stop unscrupulous individuals from taking advantage of New Yorkers trying to rebuild their lives."
Not only do higher prices cause shortages to disappear (by encouraging conservation on the demand side, and increases in supply), but they also give consumers and firms an profit motive to find ways to alleviate shortages in the future.