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Exactly, if there are no price gouging laws, the increase in prices will “trickle up” to the manufacturers, who will then increase production, thereby lowering
by zhoujianfu 6y ago
Exactly, 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.