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0 pointsdaenz6y ago0 comments

...by placing an artificial price ceiling that will ensure a shortage of goods.

In a pandemic, prices go up, rightly or wrongly, because there is an increased demand. This price scales as the difference between supply and demand grows, in order to decelerate how fast the shortage occurs relative to the speed of creating the good. The price ceiling just means the shortage happens immediately.

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yladiz6y ago· 1 in thread

But what is the price ceiling in this case? I fail to understand this argument, as this doesn't regulate the price of manufacturing a good but rather then price of its sale. If manufacturers aren't the ones setting the high prices then why would they be disincentivized to make more goods?

justinmeiners6y ago

Distribution is also a cost. Imagine a hurricane where roads are damaged and supplies can't be brought it. If incentives are high enough people will urgently find a way to get it in to sell things people want

If prices are fixed, they may just wait until the normal trucks can make a delivery.

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