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Hurricane Katrina hits southern Louisiana, leaving many people homeless. For commodities such as building materials and generators, demand is up and supply is down. This is a condition that leads economists to predict an increase in prices. In fact, in the aftermath of the hurricane, a small building - supply company more than doubles its prices on many items that are in high demand, such as generators.
a) Is the decision to increase prices ethical? Why?
b) Is the decision to increase prices rational? Why?
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