Comment by HWR_14
19 hours ago
> In a free market, the suppliers would respond to the price signal by quickly expanding their production to meet the elevated demand.
Why would they?
And you claim to have historic examples where they did?
19 hours ago
> In a free market, the suppliers would respond to the price signal by quickly expanding their production to meet the elevated demand.
Why would they?
And you claim to have historic examples where they did?
Generally speaking, if demand stays high, and existing suppliers don't increase supply, the high prices create an incentive and opportunity for new market entrants to increase the supply.
Yes everyone took Econ 101.
Now what do you think happens when developing new supply is substantially constrained by lead times?
Coz a whole lot less of you have ever dealt with manufacturing logistics.
Prices go up, until new supply comes online or demand wanes. Econ 101 is not invalidated just because you are having to go without due to high prices.
Some supply and demand curves move in days, some in months, some on years.
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