Yeah I feel like the “people shouldn’t profit from catastrophe” thing is a big part of why it’s still hard to get PPE (no one can justify extra manufacturing etc.)
In cases where the free market isn't incentivized to make the supplies we need, it's the job of the government to take over and make them. "Profiting from catastrophe" as you put it will result in price gouging.
And how that usually works is that the government offers to pay a very high price to someone willing to doing so.
This isn't all that different as the government then pays 5x for the item.
But yes, this certainly could be true.
Definitely possible but I'm not sure it's happening specifically at the moment.
If home toilet paper demand will only be high for 2 years you can't make money.
You also want prices to increase to discourage hoarding. Otherwise what happens is that people with disposable income just strip the shelves because there is no possible downside to hoarding toilet paper. They can just not buy it later with no loss to themselves if the price is the same.
So, raising the price on TP does nothing to increase supply in a 1 month time frame and reduces availability to the poorest. Instead, reduce demand with a bidet and limit customer purchases.
If you have some plants that are not at capacity, you can hire additional shifts to produce more, run on weekends, etc. Then you have additional labor costs, overtime, materials costs, etc. to recoup.
The manufacturing plant I once worked for had spare capacity for the better part of a decade, so it's not some completely unusual thing and was in fact part of our corporate strategy at the time to gain market share.
A new shift will take a while to train up and temps are... ugh... don't even get me started about the sort of people temp agencies send. We had some that only lasted a day for not listening and doing stupidly unsafe things. One of them nearly hit me upside the head with a piece of glass because he wasn't paying attention to where he was swinging it. That was his last day on the job, for precisely that reason.
What is the ideal pricing to achieve long term goals wasn't something I was addressing.
If anything it's the opposite.
Not every plant is run at a constant 24x7 three shift schedule. There are plenty of businesses that keep some slack in their manufacturing to respond to changes in demand as part of their corporate strategy, especially if they think there's an opportunity to gain market share.
But in my experience, there's usually some slack. Maybe not enough to pick up all the demand, but there's some. Maybe they have three shifts but don't work weekends or such. Then they can have people pulling lots of overtime.
Raw materials are usually well-stocked in advance. There is a limit on how much demand can spike before there are issues, of course, but some industries may have weeks or months worth of raw materials stocked. This is going to be highly variable by industry, though. Something like raw glass is nothing like stocking chickens for processing.
For TP I'd guess that they can stock a lot of raw materials, though. It's not made from anything that's going to go bad on them, so they probably stock up a lot based on whatever is cheapest.
How can one make such a vast claim without knowing things such as cost of input materials, machinery, labor, etc?
PS: And yea it’s more complex than that, you can generally skip out in advertising but may be paying significant overtime etc. But that’s rarely particularly important as there are so many inputs involved in ramping up production that you hit multiple different limits.
People in short supply also don’t just work additional hours for double pay. An hour of my leisure time is worth far more than double.
Further, just as the US abandoned domestically made masks after the H1N1 epidemic, and went back to inexpensive overseas versions -- they may do it again with PPE. So you also need to cover the costs for quite-possibly a factory you are building that might stop operating in a year or two.
Perhaps so, but if that were the case, the producer wouldn't be fairly accused of profiteering. Usually these accusations arise when the production or acquisition cost for the seller is low and the sale price is very high.
Talking about buying your own health insurance is taboo amongst some in the UK, even though it reduces pressure on the (I should "our") NHS, because to them it's immoral to have capitalism in healthcare or something like that