You're leaving out a crucial piece that is seldom mentioned. Business as usual is safe and easy by comparison to guessing when a new variant or China shutdown o

You're leaving out a crucial piece that is seldom mentioned. Business as usual is safe and easy by comparison to guessing when a new variant or China shutdown or war is going to light off. Competition can lead to lean enterprises when things are predictable. When things are unpredictable, you bias for survival by keeping a little more reserve, and if you do it right, that hopefully shows up as extra profit when things end up smoothing back out. As an aside, the violence of the whiplash could be reduced in the absence of price gouging laws. If there's about to be a giant run on masks, it's a very good thing for the distribution and production of masks to see sudden infusions of cash from higher prices, even if their costs of doing business magically didn't increase. And all this without getting into the stimulative impacts of higher prices for other firms.