> And then manufacturers will increase supply and prices will go down.

Will they? It seems like scarcity pricing is becoming a more and more common strategy.

It's the only way for businesses to not completely collapse and still meet Agenda 2030 goals of reducing emissions worldwide. I personally think that the supply chain crises will be a boon to energy and emissions reduction worldwide. That not everyone will be able to afford a big car and such, well, they'll have to adapt.

This would then leave room open for competitors to move in and price lower to move more units. Ultimately things are set to MR = MC in the long run.

Except that, in this case, chip shortages and a supply-chain crisis mean that supply won't increase.

Then the market is acting rationally and allocating limited goods to the highest bidder. Prices would go down if the population stopped purchasing at the given prices. But all it takes is one person to buy at a price just above yours to keep you out of the market.

I'm not arguing against the dynamics of the current economic system. I'm challenging whether "that's business after all" is a sound ethical defense of a decision to raise new car prices in this climate.

You could just as easily claim that industry consolidation is "rational" because it the people making the deals make a lot of money, but the overall effect is often bad for society.

And this one is not because there are enough cars in the US and even if currently no new are produced - existing are rarely decommissioned because they no longer work.

Very few people need new car now. Or need to change their car now. It is a flexible market. In the current market supply shortage means that you will have to squeeze 50000 more miles out of your current car in the next two years. It's not insulin or baby formula.

A ~30% spike in used car prices which has been ongoing for a year and is predicted to continue for 2-3 years is bad for people that need a car to commute and can't easily afford to buy another if and when theirs breaks down.

Maybe you're right and this is a fraction of a percentage of the population. I'd be surprised but am open to seeing stats on it.

That's just wrong. About 5% of cars are scrapped every year. Many people need to buy a replacement vehicle on short notice because their old car suffers a catastrophic mechanical failure, or is totalled in a collision.