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    Hurricane Sandy Case Analysis

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    Akhil Patel
    Hurricane Sandy caused widespread power outages and gasoline shortages in New York and New Jersey. The shortage resulted in long lines at gas stations and price gouging as stations increased prices. While some advocated for price caps to control prices, others argued this was not the best response and prevented markets from reaching equilibrium. The document analyzes the economic factors at play, including shifts in the demand and supply curves, and discusses various policy responses like price gouging laws and rationing to manage the crisis.

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    Hurricane Sandy Case Analysis

    Uploaded by

    Akhil Patel
    1K views2 pages
    Hurricane Sandy caused widespread power outages and gasoline shortages in New York and New Jersey. The shortage resulted in long lines at gas stations and price gouging as stations increased prices. While some advocated for price caps to control prices, others argued this was not the best response and prevented markets from reaching equilibrium. The document analyzes the economic factors at play, including shifts in the demand and supply curves, and discusses various policy responses like price gouging laws and rationing to manage the crisis.

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    Hurricane Sandy caused widespread power outages and gasoline shortages in New York and New Jersey. The shortage resulted in long lines at gas stations and price gouging as stations increased prices. While some advocated for price caps to control prices, others argued this was not the best response and prevented markets from reaching equilibrium. The document analyzes the economic factors at play, including shifts in the demand and supply curves, and discusses various policy responses like price gouging laws and rationing to manage the crisis.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    1K views2 pages

    Hurricane Sandy Case Analysis

    Uploaded by

    Akhil Patel
    Hurricane Sandy caused widespread power outages and gasoline shortages in New York and New Jersey. The shortage resulted in long lines at gas stations and price gouging as stations increased prices. While some advocated for price caps to control prices, others argued this was not the best response and prevented markets from reaching equilibrium. The document analyzes the economic factors at play, including shifts in the demand and supply curves, and discusses various policy responses like price gouging laws and rationing to manage the crisis.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Hurricane Sandy: Supply, Demand, and Appropriate Responses to the

    Gas Shortage

    Economic Factors: Financial factors such as the emergence of small companies in the
    international scenario recommend that Hurricane Sandy Supply Demand And Appropriate
    Responses To The Gas Shortage is growing in an environment where there is prospective
    growth of services. In addition to this, the truth that shop consumers are mostly trying to find
    workplace supplies for home offices recommends that the marketplace has a rising pattern
    of entrepreneurs as well as home-based organizations.

    Problem Statement: Price Gouging. Customer's gas needs to be met, governing


    officials had responded with the price cap and many policymakers were also asking
    themselves an urgent question; was this the best way to manage the crisis?

    Case Analysis: Hurricane Sandy hit the Caribbean Sea in category 3 causing massive
    destruction in Jamaica, Haiti, and the Dominican Republic. US destruction killed more than
    100 people, taking thousands of lives and billions of dollars resulting in power outages,
    affecting, New York and New Jersey the most. Gasoline shortage was there due to power
    failure at the gas station, which resulted in long queues, a hike in prices by gas stations,
    and a situation of colossal panic, aggression, and tension. Although we are trying to reach
    an equilibrium, there’s an increase in demand and shortage of supply, which shows a
    condition of shortage.

    People tried various methods, to outsmart gas purchases and balance their opportunities
    but shortages were at their peak. They were not even allowed to purchase the gas from
    outside the state.

    On November 5, a week later, some improvements were reported, and mandatory rationing
    and more gas stations were reopened which resulted in a coping mechanism for the
    shortage of supply. Prices increased in gas shortage conditions which is a shift in the
    demand curve, dollar 20 a gallon was a peak at the distributor's end and the individual
    increase was a dollar 2 a gallon owing to the services charged for delivery. The industries
    selling complimentary services and goods took advantage of the situation and resulted in a
    price-gouging situation. Such industries were the hotel industry, grocery stores, and
    common foodstuff. The generator's prices shot up by 700 dollars to 1200 dollars. This
    shows that the rise in the price of complementary goods is due to more demand for gas.
    The increase in the price of complementary goods results in an increase in supply by the
    producers. This is a condition of shortage as the demand is high and since the advantage is
    taken by suppliers.
    Although some consumers were not affected by the price sensitivity, such included
    high-income consumers who were willing to pay a premium price, and they will buy even
    when the price is more, which was an exception to the law of demand, indicating a situation
    of equilibrium.

    So, government interventions regulated the chaotic situation by listening to consumer


    complaints and decreasing their hustle for waiting in the long queues by applying the odd
    and even rule for gas sold at the gas stations.

    Price gouging conditions were imposed with strict laws and prohibition in 30 states, fine on
    gas stations were imposed and strict actions taken for increasing their rates during an
    emergency was predicted to be imposed on business and individuals. The government
    interventions regulated demand.

    Graphs of Market Equilibrium, Demand and Supply Curve.

    Price gouging refers to when retailers and others take advantage of spikes in demand
    by charging exorbitant prices for necessities, often after a natural disaster or other
    states of emergency.

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