Indeed, at that point I think rationing - either by the companies selling the product, or by the government (as we have done in times of crisis in the past) is in order. Would people be yelling about free markets like this if World War 2 happened today, and there was the kind of rationing we saw in those times? What would have happened to our country if people were so selfish back then?
Existence is not the Market, and the Market does not take place in a void. You cannot reduce the world to a bunch of economic models, because at the end of the day, people will get tired of your Quant's BS and do something that generally doesn't end well for the person who ignores human nature.
As a bonus, we all have a series of examples of what not to be that have soared into the limelight to remind us all that even if we are stuck in a pandemic, at least we weren't horrible enough to have to figure out what to do with more stock than we can feasibly sell or distribute for more than it cost to consolidate it into a single location because we were intending to pull one over on everyone else.
Win/win. Supply goes home. Everyone reminded not to be a dick, and a few people have learned a very valuable lesson about logistics, society, the economy, and what not to do during an international fucking pandemic. Maybe no one else has to deal with the damage caused by asshole speculators.
Why do you prefer that? Why do you think that individuals have no ability to adjust their personal spending such that they can purchase TP or hand sanitizer even at 2x, 3x or even 5x price points.
The shelves are getting fully restocked every single morning. Go to your local Target/Walmart/Grocery store when they open if you don't believe me. Stores, suppliers, and producers have already begun rationing and metering out goods onto shelves explicitly because of people hoarding. The shelves being empty are a result of idiots running around trying to buy up everything they can, and stores reacting properly. The "free market" is already acting in response to those hoarders, they're discouraging it, and preventing it on a grand scale pretty effectively.
Your complaint about "not allowing the price to float" is a complete non sequitur even if you're still the type to swallow free market ideology hook, line, sinker, because people buying in surplus isn't demand. It's just, well, hoarding. Coronavirus isn't going to cause people to be thirstier, hungrier, or need to wipe their ass more. People are just buying in advance. Without people fearing for a worldwide pandemic nobody would be willing to pay increased prices for these goods. So it's not actually about demand, it's about artificial scarcity driven by a global pandemic. Thus, price gouging tickets.
But even if you don't buy any of that, the vast majority of our supply lines are JIT, so "empty shelves" aren't really a thing... what we'd really see is a dwindling of supply over a period of time. Which isn't happening.
Of course it is demand. You may also call it "hoarding" those aren't mutually exclusive concepts.
Where did I say they would charge the same as the hoarders? I simply said the prices should respond faster to the supply and demand. Yes that will make prices go up accordingly, and it will also decrease the incentive to hoard and resell.
Prices of goods are already set largely by this model. For you to think that the prices responding faster to supply/demand is insane is to also suggest that all prices set by supply/demand is insane.