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> the rise in price incentivises the market to produce more of the product / incentivises more producers to enter the market.

Ask yourself this question: if a TP manufacturer were to double their production effectively immediately, how long would it take for that extra product to reach the shelves? I don't know the answer specifically for toilet paper, but it's generally going to be in the region of a month or two for most consumer products.

Price gouging isn't a signal to manufacturers to produce more; it's opportunistic middlemen profiting off of the inability of the supply chain to absorb a temporary shifting of demand.



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