4 ms·
Yes, manufacturing does take time to ramp up, but higher prices mean that people use that good more efficiently, try to find substitutes, and try to import more
by ggreer 6y ago
Yes, manufacturing does take time to ramp up, but higher prices mean that people use that good more efficiently, try to find substitutes, and try to import more from elsewhere. Also if there was a norm of not having price limits during emergencies, companies (and scrappy entrepreneurs) would have an incentive to stockpile goods in times of plenty so they could sell them at a large markup in a crisis.
- veggieburglar 6y agoYou might also say they could have an incentive to manufacture a crisis in order to attain said large markup.
- sokoloff 6y agoPerhaps even more importantly, regular people would have incentive to have some sensible amount of supplies on hand on a regular basis, providing some decoupling capacitance in the system. We normally have some stock in the pantry but really stocked up around the 3rd week of Feb. Exiting this, we are likely to keep a deeper supply of certain shelf-stable items on hand, to reduce the risk of inconvenience next time. If we had strong price signals to support that behavior, I think there’s power in the whole public doing that.