ETH 1

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Assignment Overview

Natural Disaster and the Retail Business Owner

In the aftermath of Hurricane Sandy, which hit the greater New York area in November 2012, the news was full of examples of price gouging—gasoline for $4 per gallon, a loaf of bread for $7, double rates for motel rooms, and on and on. This is a frequent response by retailers in the wake of natural disasters. The retailers involved (and not a few economists) argue that raising prices is a natural response to supply shortages and it is their right as business owners or managers to set their prices at levels that serve their interests. Many others (including politicians who favor laws against price gouging in such situations) take a dim view of what they see as taking advantage of consumers caught in vulnerable circumstances where choices for needed products and services are few. What do you think?

Case Assignment

Read the background material in the Presentations file for this module and Futrelle, D. (2012). Post-Sandy price gouging: Economically sound, ethically dubious. Time (November 2). Retrieved March 31, 2014, from http://business.time.com/2012/11/02/post-sandy-price-gouging-economically-sound-ethically-dubious/

Then search the Internet for examples of price gouging. Apply that material to the pricing decisions discussed in this Case in answering the following questions:

  1. What ethical principles support, respectively, raising prices in the wake of natural disasters and opposition to such increases?
  2. Which approach would you advise a convenience store owner to follow in an area hit by a tornado or hurricane?

Write a 2- to 3-page paper (not counting cover and reference pages) explaining your analysis and advice. Reference any sources of information about normative ethics principles and give relevant examples.

Assignment Expectations

  • Your paper should be double-spaced and in 12-point type size.
  • Your paper should have a separate cover page and a separate reference page containing the full citations corresponding to the in-text citations you choose to use in the body of your paper.
  • Cite sources of information in your text.
  • Proofread your paper before submitting it.

 Upload your paper by the end of the module.

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