I will further this a bit: there is a lag in new entrants that varies based on the industry (e.g. CapEx intensive industries need more time to ramp production).

I will further this a bit: there is a lag in new entrants that varies based on the industry (e.g. CapEx intensive industries need more time to ramp production). This clearly makes the case above (bottled water in disaster areas) even more of a red herring. Sometimes even the Red Cross has immense logistical trouble delivering supplies to catastrophe stricken areas. Obviously there is some need for humanitarian aid in the world (even in a purely free market society) General microeconomics holds that markets where suppliers are earning excess profit will be targeted by new market entrants for a piece of that action. You see that happen everyday. Dollar menus at fast food restaurants, pizza specials between dominos/papa johns/pizza hut, Lyft/Uber/Taxis, Andriod/iPhones, Kindle Fire/iPads, Amazon vs every supplier known to mankind, etc There are literally millions of real world examples of new market entrants seeking to cut costs for a increased share of a market. Amazon does this 2.5 million times a day apparently (source: http://qz.com/157828/amazon-changes-its-prices-more-than-2-5-million-times-a-day/ http://qz.com/157828/amazon-changes-its-prices-more-than-2-5...)