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I think you’ve got it backwards. The only reason people were able to hoard so many units of hand sanitizer etc. was because stores sold it for too low of a pric
by neilparikh 6y ago
I think you’ve got it backwards. The only reason people were able to hoard so many units of hand sanitizer etc. was because stores sold it for too low of a price (ie. the store didn’t “price gouge”).
- zhoujianfu 6y agoExactly, if there are no price gouging laws, the increase in prices will “trickle up” to the manufacturers, who will then increase production, thereby lowering prices. With price gouging laws, an increase in demand is not allowed to increase prices, so there’s no incentive to increase supply, and the result is shortages.
- KozmoNau7 6y agoThe incentive to increase production supply is the ability to sell more products, which is decoupled from the ability to sell the same amount at higher prices.