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herdrick | 1 year ago

Oh wow! Sorry about that. Empty aisles, i.e. a true shortage, only happens due to an artificially low price -- do you know what is holding the price down in this case? Perhaps price gouging laws? Or (misguided) big chain stores' policies against big price increases?

I recommend little mom-and-pop stores. Typically they feel free to quietly charge a market-clearing price.

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bsder|1 year ago

> Empty aisles, i.e. a true shortage, only happens due to an artificially low price

That's not true due to Always Late Inventory(tm). See: Covid and toilet paper in the US.

Because inventory is optimized to almost nothing, a demand shock can strip the shelves (the last remaining point of inventory) before pricing can adjust. Super-optimization means that supply has very little ability to increase and it would take many months to backfill the drained edge inventory. Prices shoot up, but don't actually make a dent as there is enough inelastic demand to always drain the incremental inventory resupply.

Add in the fact that a harvest is a specific point in time while consumption is continuous and it's really easy to wind up in a shortage situation that takes a remarkably long time to correct.