Uploaded March 2020 | Updated September 2026, 24 minutes ago
In light of the events which are unfolding in 2020, it makes sense to (properly) explain concepts such as profiteering, price fixing and price gouging by starting with the definition and taking it from there so as to put together an easy to understand comparison.
Simply put, profiteering is a fairly broad term which revolves around generating high profits through less than ethical methods, whereas price fixing and price gouging represent two specific types of profiteering.
Price fixing represents an anti-competitive behavior type where market participants collude so as to keep prices artificially high rather than compete with one another and price gouging is the prices of increasing prices so as to take advantage of a supply and demand shock.
As became apparent this year, speaking of price gouging specifically, quite a few merchants hiked prices of supplies that people started buying en masse, anything from toilet paper to hand sanitizers and especially protective equipment such as masks.
As explained in the video and as tends to oftentimes be the case in the world of economics, opinions with respect to whether or not profiteering, price fixing and/or price gouging should be punished... well, differ :)
In light of the events which are unfolding in 2020, it makes sense to (properly) explain concepts such as profiteering, price fixing and price gouging by starting with the definition and taking it from there so as to put together an easy to understand comparison.
Simply put, profiteering is a fairly broad term which revolves around generating high profits through less than ethical methods, whereas price fixing and price gouging represent two specific types of profiteering.
Price fixing represents an anti-competitive behavior type where market participants collude so as to keep prices artificially high rather than compete with one another and price gouging is the prices of increasing prices so as to take advantage of a supply and demand shock.
As became apparent this year, speaking of price gouging specifically, quite a few merchants hiked prices of supplies that people started buying en masse, anything from toilet paper to hand sanitizers and especially protective equipment such as masks.
As explained in the video and as tends to oftentimes be the case in the world of economics, opinions with respect to whether or not profiteering, price fixing and/or price gouging should be punished... well, differ :)
