Consider two gas stations.
One gas station charges the same price, or a slightly lower price, as the others around it. Let's say the price is $4.39. They run out of gas pretty quickly, because there is a shortage. Then, they close, and put up signs, "No Gas! Closed!" Cars that pull up to the pumps are faced with a gas price of infinity, even if they only need a gallon or two to continue their journey.
Gas station number two charges the market price, a high price implied by the gasoline shortage. So, they are charging $6.21 per gallon. They remain open, still paying their workers, and providing gas, milk, and other necessities to the community. There is no other gas station in the area open. People pull up all night, buying just 3 or 4 gallons, enough to ensure their mobility and safety until the gas shortage passes, in a week or so.
Which gas station is providing the greater service? The difference in revenue, for such a short period, is pretty trivial. But the difference in service is enormous. Gas station 1 is charging an infinite price, and gas station 2 is charging an actual price, for actual gas.
So, the half-wits at the NC Attorney General's office...go after gas station #2! Arrest them! Prevent them from selling that gas that people need!
Remember, the only way that the above scenario could possibly be true is if there is a severe shortage. If you charge the below market price, you will run out, for sure. Why is running out of gas, and closing, noble?
And, without a shortage, no one would ever pay the $6.21 price. Gas stations ALWAYS charge the maximum price they can get from consumers. It's a business, not a charity.
Further, remember that (1) price fixing is a crime, and there is zero evidence, and in fact no charges, of price fixing. The only crime here is charging the market price, the one that ensures that people who need gas can actually get it. And (2) the price gouging itself, as I have argued elsewhere, is the CAUSE of the shortage. The law is the problem, not the solution. Without the price gouging law, NC would have had plenty of gas, though at a higher price (still less than the infinite price implied by a gas station that is CLOSED, however.)
Here's the cool thing: Roy Cooper, AG of NC, made an announcement:
Gas price-gouging probe nets $56,000
RALEIGH -- North Carolina's attorney general says his office has gotten more than $56,000 in refunds, civil penalties and energy assistance funds from gasoline price gouging investigations.
Attorney General Roy Cooper said Wednesday in a statement that the results show "we won't tolerate those who try to make an unfair profit off of a disaster."
Cooper was one of the attorneys general who began investigations in the fall after Hurricane Ike hit the Texas coast and gasoline prices began to rise.
Cooper's office said thousands of consumers complained after the state price gouging law was triggered.
His lawyers still have civil lawsuits pending against two gas stations.
Some stations charged more than $5.49 a gallon.
Wow! They "netted" $56,000. Since "net" means revenues in excess of costs, they must have collected a lot, right? 4 lawyers, and numerous assistants, plus police, working on these cases for more than six months? Oh, wait, the $56k is actually the gross amount collected. The "net" is more like a $200,000 loss, when you account for the costs of those lawyers and bureaucrats beavering away at punishing those gas stations that had the audacity to remain open and sell the gas that people needed. (Sounds like Roy Cooper knows just exactly what the facts is. The problem is that he makes his living off of the people's taxes.)
I remember when this was going on, in September, in NC. I got a call from a reporter, in Charlotte. He asked if I still thought that the price-gouging law was a bad idea, given all the high prices. I said, "Wait a week. Because of the price gouging law, you are going to be unable to buy gas in Charlotte. The price gouging law is going to cause a shortage."
The following Monday, he called back. "How did you know? Gas stations are closed, all over the place. Charlotte is out of gas!"
Gee, bud. I guess I am a genius. Or else I have taken an intro level econ class at some point. Because even an intro level course will teach you that "price gouging" laws don't prevent shortages, they CAUSE shortages.