4 ms·

> They only would have made the decision to scale production if they estimated the profit from filling this short-term demand would make up for the cost of havi

• logicchains 7y ago
  >So what you're saying is, they wouldn't have scaled production, so your entire proposition about why the price increase would be an effective means to alleviate the problem was false. Scaling production is not a binary yes/no thing; they wouldn't scale it so much that scaling back hurt them more than the profit they made from scaling gained them. Or to look at it another way, only the producers who could scale without "too much" cost would scale.
• EdgarVerona 7y ago
  > only the producers who could scale without "too much" cost would scale. > the rise in price incentivises the market to produce more of the product / incentivises more producers to enter the market It sounds like this is built under an assumption that there is extra capacity available without significant or permanent costs. I don't know the level of capacity at which they are currently producing, but rationally speaking the mere fact that the shelves are empty due to demand would mean that intelligent companies would already have ramped up that capacity in response. So if the shelves remain empty, is that a sign that we've reached the level of demand where the cost of additional supply becomes more expensive/ongoing?