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Comment by Nifty3929 | Hacker News Reader

Why not? Surely if you can get away with price gouging, then you would want to price gouge on more stuff, right? Of course, there are diminishing returns here, because as you produce more stuff, you might be able to gouge less and less. But certainly there must be some max-profit equilibrium higher than the current price, if you are already able to gouge.

Price gouging usually leads to producing more stuff, if it goes on long enough and you are allowed to produce more.

Healthcare is an example where this doesn't work, because you aren't allowed to produce more stuff. You can gouge all you want, but can't provide any additional quantity of services. (See: Certificate of Need laws in the US)

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In many countries there is a tendency in healthcare to perform a lot of medically unnecessary or even harmful surgeries (back, hips,...) to make a larger profit. The optimal treatment would be cheaper and less profitable, so it is not chosen.

Hospitals kill people all the time. Especially elderly. Many treatments are invasive and cause complications. They won't catch the complication until it's too late, or now you have two compounding medical problems, and many elderly can't survive that. The medical bias is the sicker you are, the stronger intervention / medicine you need.

I think there are other factors that contribute to the uniqueness of healthcare. In the US, for example, it seems to be the one area where you aren't told the price before receiving the product/service. This obviously makes it easier to jack up the prices. Also, the urgent need often makes people insensitive to the price even if they knew it.

Supermarkets in my area have a near monopoly and don’t meaningfully compete anymore - they can charge whatever people will pay. It’s all owned by Kroger and the nearest non Kroger supermarket is a dozen miles away.

There's a supply and there's demand. Prices will continue to increase as long as people demand the goods and are willing to pay the price.

How much are you willing to pay for the basic necessities of life, life land, shelter, food, water?

If the providers of those necessities possess a monopoly, either natural or through regulatory capture, humans will pay whatever they have to get those necessities. It is important for social prosperity to prevent extracting excess profits through monopolisation, either by destroying the monopoly or by taxing it and reducing other taxes on the individuals.

Grocery chains are notoriously low-margin businesses though. Maybe a few places are able to gouge, but as a whole, they cannot and still be low-margin as an industry.

Having a low absolute profit margin compared to other business does not mean that doubling it should not count as price gouging.

I think you're misinterpreting my point.

If they doubled the price consistently, they would no longer be a low margin business. The fact that they are low margin is evidence that they are not gouging.

I think there's also a misperception of the public on a lot of items. Many of the dramatic price increases we see are deferred inflation from not raising prices (and subsequently eating the added supplier cost). We generally don't see steady 2-5% price increases every year, but rather large step increases every few years. Many of those step increases are catching up for the previous years where there was no increase.

FWIW, I'm not saying there isn't opportunism going on, but it's much less likely in low-margin commodity businesses.

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