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The point is that capping the price of e.g. masks means _fewer masks_ are produced, which is worse for stopping the pandemic.

Price gouging laws typically apply at the consumer point of sale, I'm not sure they prevent a higher price from factory to store.

If the law prevents the store from charging a high price to the consumer, then that effectively prevents the factory from charging a high price to the store, because the store would make a loss if it accepted that price.

>>What if a seller increased the price of a good or service because the seller’s costs of providing the good or service increased?

>If the seller can prove that the increased price is directly attributable to increases in the cost of labor or materials needed to provide the good or service, the seller may not be liable under the statute.

It's right there on the linked page. This basically prohibits large markups while allowing for passing of costs.

How is that an externality?

I am intimately aware of exactly what constitutes an externality. I fail to see how this situation (two parties agreeing to a high price for a consumption good) has impacts on third parties.

I'm not sure how "pandemic" applies, either.