Re:The N95 mask shortage America can't seem to fix
by bleepblorp on Wednesday September 23, 2020 @10:36AM
(#24567587)
Executives are greedy, not stupid.
They're not going to respond to a short-term increase in prices--in any market, not just pandemic-related PPE--by increasing long-term production capacity. They know that demand will eventually drop before they can pay off their capacity investments.
Indeed, in the absence of price controls, cutting production in the face of increased short-term demand can increase profits by raising prices.
There's a reason the oil industry routinely shuts down refineries, pipelines, and other infrastructure for 'scheduled maintenance' during long weekends, after all.
They're not going to respond to a short-term increase in prices--in any market, not just pandemic-related PPE--by increasing long-term production capacity. They know that demand will eventually drop before they can pay off their capacity investments.
Indeed, in the absence of price controls, cutting production in the face of increased short-term demand can increase profits by raising prices.
There's a reason the oil industry routinely shuts down refineries, pipelines, and other infrastructure for 'scheduled maintenance' during long weekends, after all.