Economists who defend disaster profiteers are wrong

Re:Economists who defend disaster profiteers are wrong by jcranmer on Tuesday April 14, 2020 @02:55PM (#22869974)

What you're missing is that, in the timescales at issue with price-gouging, both supply and demand are inelastic. So at, say, $10, you'd have 100 units of supply and 200 units of demand, while at $20, you have... 100 units of supply and 200 units of demand.

Higher prices don't discourage hoarders, because a fair fraction of the hoarders are going to be people who are planning on reselling them to desperate people, so they're virtually guaranteed a profit. If you want to discourage hoarders, then enact purchasing limits: limit 1 per person.

[ Parent | on HN ]

Re:Economists who defend disaster profiteers are wrong by Consultant32452 on Tuesday April 14, 2020 @03:40PM (#22870516)

I dismiss the idea that demand is inelastic. At $1/mask basically everyone wants an N95 mask. At $1k/mask most consumers are going to wear a bandana or alternative type of mask.

[ Parent | on HN ]

Re:Economists who defend disaster profiteers are wrong by jcranmer on Tuesday April 14, 2020 @03:49PM (#22870606)

Sure, demand isn't perfectly inelastic. But at the price points we're talking about, the demand isn't dropping off fast enough to make the market look even close to equilibrium.

But I noticed you didn't even attempt to engage with the solution of enforcing purchasing quotas instead of allowing price gouging.

[ Parent | on HN ]

Re:Economists who defend disaster profiteers are wrong by Consultant32452 on Tuesday April 14, 2020 @04:02PM (#22870752)

Enforcing purchasing quotas does not allocate resources to where they're most needed.

Pricing (including gouging) may be imperfect, but it is better than central resource allocation, price fixing, etc. at leading to efficient allocation of resources.

[ Parent | on HN ]