In 1981, a Boston-based gas station owner set the highest gasoline prices in the
ID: 1233652 • Letter: I
Question
In 1981, a Boston-based gas station owner set the highest gasoline prices in the nation. During that summer, he charged $1.69 per gallon for unleaded gas during the daytime and $2.59 per gallon at night, when other downtown gas stations were closed. (His all-time high price was $3.99.) Even at these extreme prices, however, the station owner sold an average of 3,000 gallons per week, half of this at night. Despite catcalls, pickets, and even vandalism from angry motorists during the gasoline crisis, the ownerExplanation / Answer
Price gouging is a pejorative term used when supply or demand conditions cause an increase in the price of an item that people don't like paying.
Voluntary exchanges benefit both parties. No one was forced to buy gasoline from this guy. He was clearly trying to maximize his profits, but there is nothing wrong with that, assuming, of course, you believe in capitalism. (Not sure we really do in this country, although we claim we do).
Clearly he benefited by his dual price policy. He profited by charging a higher price when supply was restricted due to the competition not being open.
As to why the competitors didn't participate, who knows? Maybe they didn't want to open at night due to possible crime or not being to find anyone who wanted to work then. Maybe they didn't want to alienate people.