cross the United States, government officials have threatened to prosecute sellers they deem to be taking advantage of consumers by charging higher prices during the COVID-19 pandemic. In some cases, those officials have followed through on those threats. Some analysts are critical of such policy responses to emergencies, both with respect to the short-run, intended consequences, and the less certain, longer run impacts on the operation of the market process. Other analysts view such policies as productive toward effecting other desirable consequences that override any concerns about efficiency and entrepreneurial discovery in the market.

1. Is it true that sellers are taking advantage of consumers by charging higher prices? (Hint: if sellers are responsible for the currently higher prices, why don't they charge higher prices during normal times?) Use examples to illustrate the points that you are making. Focus intently on the incentives that buyers and sellers face when conditions in the market change. Focus on the economic analysis. If you think that sellers are unfairly taking advantage of consumers under the emergency conditions, you should seek to articulate why you think so and relate it to your economic analysis.