> if there's N capacity to provide a necessary necessary good/service, but M > N need, raising the price doesn't seem like a great solution to manage it in a crisis situation
Within a crisis, yes. But this also did-incentivises overprovisioning, i.e. building slack into the system.
Not speaking in general terms, but just for cloud services—it’s just bananas expensive to overprovision at a cloud provider.
The more profitable (and ecological) way to run a cloud provider is to provision only for the capacity that you need, and then pack your machines with low-priority tasks with lower guarantees where you can simply start load-shedding in a crisis.
There are thousands of businesses that will look at EC2 spot pricing and simply not schedule their jobs above a certain price point, and I’m sure all the cloud providers have internal workloads running at lower priority (e.g. transcoding YouTube meme compilations) that will run at reduced capacity. Personally I think the whole thing is kind of elegant, even if there are a lot of rough edges in practice.
Within a crisis, yes. But this also did-incentivises overprovisioning, i.e. building slack into the system.