I know an EE in the toilet paper manufacturing. The production rate wouldn't change in the time frame you want it to because it is impossible. You'd have to bring in new machines, set them up on the line (the rest of the line has to stop), and trouble shoot any issues - this reduces production in the short term. For any temporary price increase it just isn't going to happen.

So, raising the price on TP does nothing to increase supply in a 1 month time frame and reduces availability to the poorest. Instead, reduce demand with a bidet and limit customer purchases.

Do you think there would be any effect on the mindset of toilet paper manufacturers if they knew they could raise the price in a shortage? Would they not want to prioritize higher flexibility in production, since they would be able to profit from the higher prices during a shortage?

That's only true if all the plants run all their lines 24x7.

If you have some plants that are not at capacity, you can hire additional shifts to produce more, run on weekends, etc. Then you have additional labor costs, overtime, materials costs, etc. to recoup.

The manufacturing plant I once worked for had spare capacity for the better part of a decade, so it's not some completely unusual thing and was in fact part of our corporate strategy at the time to gain market share.

Right, but that doesn't mean the price has to increase. If they are profitable and handle all their fixed costs running a single shift, then the second shift should be more profitable at the same price. (Assuming the machines can handle it, etc.)

Depends on how much overtime they have to factor into there. In the short term, especially for short term demand, it's going to be a lot of people making time and a half or 2x more likely than not.

A new shift will take a while to train up and temps are... ugh... don't even get me started about the sort of people temp agencies send. We had some that only lasted a day for not listening and doing stupidly unsafe things. One of them nearly hit me upside the head with a piece of glass because he wasn't paying attention to where he was swinging it. That was his last day on the job, for precisely that reason.

That is addressing a different point. The comment I was responding to claimed people were upset that companies are making a profit. I countered that profit is OK, profiteering is what has people irate.

What is the ideal pricing to achieve long term goals wasn't something I was addressing.

And MattGaiser's point is that the line between profit and profiteering is vague. The claim is that by saying no to vague "profiteering", we have at least discouraged some of the morally healthy profit that would've encouraged otherwise inefficient production.

The short term is too short: the investment won't pay back. Almost all profiteering reduces supply by causing hoarding and waste rather than use. Plus the dead weight loss of people killed by lack of PPE.

How does profiteering reduce supply? Or it's use?

If anything it's the opposite.

I agree if the disaster is truly short term, but is an 8 month rolling quarantine short enough to count?

If their supply chains are decimated, they won't receive new equipment for additional manufacturing.

But they may be able to hire additional shifts or work overtime on existing production lines.

Not every plant is run at a constant 24x7 three shift schedule. There are plenty of businesses that keep some slack in their manufacturing to respond to changes in demand as part of their corporate strategy, especially if they think there's an opportunity to gain market share.

What percent is that? Also dont look just at manufacturing, but things like transport and raw inputs.

That's the rub, of course, it's going to vary by time and by industry and I doubt anyone but those who run the places can give you real numbers.

But in my experience, there's usually some slack. Maybe not enough to pick up all the demand, but there's some. Maybe they have three shifts but don't work weekends or such. Then they can have people pulling lots of overtime.

Raw materials are usually well-stocked in advance. There is a limit on how much demand can spike before there are issues, of course, but some industries may have weeks or months worth of raw materials stocked. This is going to be highly variable by industry, though. Something like raw glass is nothing like stocking chickens for processing.

For TP I'd guess that they can stock a lot of raw materials, though. It's not made from anything that's going to go bad on them, so they probably stock up a lot based on whatever is cheapest.