Yep - 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. To some extent non necessary uses would decrease, but you also end up with more wealthy people who want it more getting it, and more generally there won't be any distinction between want and need.

> 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.

Just like outside a crisis situation.

Possibly, but in a crisis situation it is quite a bit more important to deliver adequate service to the "need" group. Outside of a crisis, the "need" group can pursue less expensive alternatives at their leisure. Right now, "fast" is critical.

And outside of a crisis situation demand patterns change much more gradually - long enough for manufacturers to ramp up production, more competitors to emerge etc. The normal feedback loops that make core goods available to the masses don't have time to happen right now.

Precisely. It seems like most manufacturing & supply chains have some elasticity for increased demand, e.g., toilet paper manufacturers were able to increase production either 10% or 20% very quickly (I forget which), but after going all out with 24 hour shifts, you can't do much more in the short term. Also, the more companies that have to do this, the more likely there will be correlated supply chains that feed those companies their raw materials, meaning the issue contaminates the supply & logistics process one more link up the chain.