[CharlieDigital]

> Convince me that isn't price gouging. It's literally plastic and water.

Not that I fundamentally disagree, but your example is probably not a great one.

First is that fuel costs were abnormally high for several months and water in plastic bottles isn't exactly cheap to transport.

Second is that plastic is sourced from oil and guess what? It's been quite expensive until the recent leveling off.

Third is that as some regions of the US start to run out of ground water due to unusually long drought conditions, the availability of local water sources also dries up and thus requires buying more expensive sources of water or bringing that water in from further away.

[swagasaurus-rex]

These issues affect everything a grocery store sells. Crops are water dependent, food is heavy and bulky to transport, and it's all wrapped in plastic.

Previously the food industry competed on price. Supply was disrupted which any econ student would tell you increases prices. But the second order consequence was that these companies no longer competed on price, for a short time. They could justify price increases because everybody including their competitors were doing it. Since the grocery stores set the price, they determined that luxuries like 'bottled water' could go up higher since their price-sensitive customers rely more on necessities. Once supply stabilizes, these companies might start competing on price again. But in a free market, as long as their competitors keep their high margin items expensive, they can do so too.

[lcnPylGDnU4H9OF]

To provide another perspective, it's worth noting that the example given contrary to "gouging" doesn't account for the practice occurring in multiple industries given that it only looks at food as a share of an individual's disposable income ("the average share of Americans’ disposable personal income (DPI) spent on food").