So if we let them take more advantage of the situation then it will improve?

Yes. If factories can hike prices, then they can recoup their investments faster. Right now there's little incentive for them to invest into expanding capacity, because the demand eventually dies down, and they never see a return on the sums they invested.

https://news.ycombinator.com/item?id=22789340

>The common theme is that during an outbreak like this, everybody wants to be his customer. But as soon as an outbreak subsides, his customers dump him and run back to China. The reason? His masks may cost a dime each, but a made-in-China mask might go for two cents.

>“Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.”

Who’s going to invest anything in solving this problem, knowing we will indignantly refuse to compensate them? There would be stockpiles and reserve factory capacity if only we allowed them to be worth keeping.