I'm not claiming that manufacturers are at 100% capacity.
I'm claiming (or more specifically, the person I quoted is claiming) that there isn't an underlying genuine shortage (i.e., that any inability to buy things in practice are caused by things other than "the product you want to buy literally hasn't been produced yet"), and so whether a manufacturer is at 100% capacity or 20%, they're still producing enough. That is, I think, the same claim you're making - that the world is not running out of toilet paper and all we have is local shortages.
I'm also claiming that if a manufacturer is not at sufficient capacity to meet demand, the cause is something other than a need for the per-unit price to go up. Generally, as production increases, the cost of production per item goes down. I certainly agree that manufacturers can take plenty of actions to increase capacity - I do not agree that those actions necessarily require them to raise prices.
> I'm not claiming that manufacturers are at 100% capacity.
Cool. So that means that manufactures have spare capacity which they can use to make more product.
So, there is no real problem here with everyone buying a bit of extra toilet paper. Manufacturers, will just use that spare capacity, to fulfill that demand.
> the cause is something other than a need for the per-unit price to go up.
Ah, here is the mistake. The extra capacity that I am talking about, still costs extra money to activate. IE, running the factory for longer hours requires overtime pay, as one example.
That is how the increase in price would cause capacity to be used more, and for the local shortages to be solved faster.
Marginal cost generally increases in the short term, as temporary, but expensive methods are used to reactive unused capacity.
In the long term, cost per unit goes down, because of economics of scale. But in the short term, you have to do things like pay overtime pay, ect.
The expensive short term costs are why the increase in price helps increase short term capacity.
> The extra capacity that I am talking about, still costs extra money to activate
You're claiming that both
a) not enough toilet paper exists to satisfy genuine demand
b) in order to meet that demand, they need to raise prices
I agree that it is theoretically possible that not enough toilet paper exists, and I agree that there exist ways to increase production that involve spending more money. Both of those are different from saying that in reality not enough toilet paper exists, and in reality manufacturers need (or even want) to increase capacity by increasing per-unit expenses. That's what my question is about.
More importantly, those seem like testable claims. Again - have any toilet paper (or hand sanitizer, or whatever) manufacturers raised prices? Have any of them said that they're unable to supply enough to meet demand? Have any of them said they could meet demand better if they could raise prices?
And back on topic, have any of them found themselves unable to raise prices because of price-gouging laws? I'm pretty sure that if a manufacturer raises prices, and if resellers pass that cost on to consumers (and do not disproportionately increase their margins), that isn't price gouging, and therefore resellers can actually charge more, and therefore they can actually accommodate manufacturers charging more, and so we have nothing to worry about. Do you disagree with that?
> a) not enough toilet paper exists to satisfy genuine demand
> b) in order to meet that demand, they need to raise prices
I am claiming that there is not enough local capacity to satisfy a very very short term local demand. And that an increase in prices can help satisfy the local capacity issue.
IE, if there is a bunch of supply in a different place, transporting that is possible, but costs money.
(I should have just talked about transportation, now that I think about it. The "problem" is actually way more short term than something where factory hours matter at all)
> Do you disagree with that?
My main argument that I attempted and failed to communicate is actually more that freaking out about "hoarders" is really silly, and that none of this is actually a big deal.
The amount of time that these local shortages last, is measured in days, before the next shipment arrives.
Which is why enforcement of this law is misguided. It is making a huge deal of an extremely minimal issue.
Worst case scenario, some people have to wait a couple days for the store to get the shipment in, or they have to travel a half hour to the nearest Costco. Not a big deal.
I'm claiming (or more specifically, the person I quoted is claiming) that there isn't an underlying genuine shortage (i.e., that any inability to buy things in practice are caused by things other than "the product you want to buy literally hasn't been produced yet"), and so whether a manufacturer is at 100% capacity or 20%, they're still producing enough. That is, I think, the same claim you're making - that the world is not running out of toilet paper and all we have is local shortages.
I'm also claiming that if a manufacturer is not at sufficient capacity to meet demand, the cause is something other than a need for the per-unit price to go up. Generally, as production increases, the cost of production per item goes down. I certainly agree that manufacturers can take plenty of actions to increase capacity - I do not agree that those actions necessarily require them to raise prices.