The Huntsville Times reported on September 12 that, in response to the looming threat from Hurricane Ike, Alabama Governor Bob Riley declared a formal state of emergency. The governor's declaration of emergency activated the state's price-gouging law, which makes "unconscionable pricing" illegal during times of emergency. The Times quoted Riley as saying that he thinks "a threat to public health is a strong possibility due to the shortage of fuels." Hurricanes don't cause shortages, however. Price controls do. A "shortage" occurs when the amount of a good demanded exceeds the amount of a good supplied at the prevailing price. In...
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Do Hurricanes Cause Shortages?
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