Up at the Register: What is Price Gouging and Why is it Wrong?:
In a crisis situation, it is possible for monopoly suppliers to charge prices for goods that buyers cannot afford — thus becoming not ordinary monopolists but price-gougers. Note well: This doesn’t mean buyers don’t recognize the value of the supplier’s work and risk. Rather, the problem is that the reason it is possible to charge exorbitant prices is because the goods and services in question are necessary for survival. People will literally die if they don’t have clean water.
Contrast this to the Disneyland scenario: People will not literally die — nor even figuratively do so, we hope — if they don’t have a Disney vacation.
Price gouging is the act of choosing to profit off someone else’s life-and-death desperation rather than to show generosity.
It is bad for you to do this to yourself.
Most people instinctively know that price gouging is a nasty thing to do. A few people though, rightly observing that price rationing via free markets is ordinarily the go-to method for figuring out how to satisfy unlimited wants and needs with limited resources, get busy in their head thinking up rationalizations for why it’s just “good economics” to allow price gouging.
It isn’t good economics, and for those people, the Register article puts a toe into the world of price elasticity of demand and all that stuff.
Summary: You can be a decent capitalist and still have moments — fire, famine & flood come to mind — when you notice that the market is there to serve you, not you to be slave to the market.