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> In emergencies like this, there isn't enough supply available anywhere to meet demand In the presence of price gouging laws perhaps, but not in general. I of

• wtallis 7y ago
  > In the presence of price gouging laws perhaps, but not in general. I of course acknowledge the overhead cost of retrofitting existing manufacturing setups to produce masks, Price gouging laws do not change the underlying facts of how long it takes to spin up new production lines. In an emergency, suppliers cannot respond quickly enough, by definition. The problem to be solved is how best to allocate existing stocks and production output, not how to incentivize new producers.
  • epr 7y ago
    > Price gouging laws do not change the underlying facts of how long it takes to spin up new production lines. Of course they don't. What they do accomplish is preventing prices from rising quickly enough to justify new production lines. It really comes down to if manufacturers think they can make enough to cover the costs of changing production lines to the emergency good, then turning them back, and then some. This is compared to how much they make doing what they have always done. Price gouging laws lower the profits they would make.
    • wtallis 7y ago
      > What they do accomplish is preventing prices from rising quickly enough to justify new production lines. How does this matter, if either way the new production line won't be up and running until after the emergency is either over or has been seriously exacerbated by poor allocation of goods? It seems like you're still trying to pretend that markets are efficient and can always respond quickly, and that's simply not true.