=+15.9 Policy Application: Anti-Price-Gauging Laws: As we will discuss in more detail in Chapter 18, governments sometimes interfere in markets by placing restrictions on the price that firms can charge. One common example of this is so-called “anti-price-gauging laws” that restrict profits for firms when sudden supply shocks hit particular markets.

A. A recent hurricane disrupted the supply of gasoline to gas stations on the East Coast of the United States. Some states in this region enforce laws that prosecute gasoline stations for raising prices as a result of natural disaster–induced drops in the supply of gasoline.