Within the first paragraph of the first item in the latest TIME, managing editor Richard Stengel demonstrates his poor grasp of economics:
When I was walking home from the office a few nights after the election, I passed a newsstand in New York City that had just one copy of the [TIME Obama commemorative] issue left for sale ? marked up to $25. While I’m against such price gouging, it was a sign that the issue had already become a must-have piece of American political history.
Perhaps Mr. Stengel could benefit from a lesson about “price gouging” from Roy Cordato:
From the perspective of economic science, and particularly the subdiscipline known as ?price theory,? the concept of ?price gouging? or ?extreme pricing? or ?unreasonable pricing? has no meaning. In fact, none of these terms appear[s] in the index of any of the five most widely adopted principles of economics textbooks used in college classes in the United States.
Cordato explains more about the myths of price-gouging here.
