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The price mechanism is even more important in these cases though. Preventing it from adequately responding to changes in supply and demand only causes more shortages.



What response exactly?

You can't build a bottled water factory overnight, it's not economically sensible to do so to fulfill a short demand.... and if you can't get the bottled water thee for some reason then it is even less able to respond to demand.

Meanwhile buyers are not rational and those with extra money and will buy up huge amounts just to store "just in case" while places that need it won't get it.

Pricing fluctuations there don't really change anything. With humans being the buyers it just doesn't work out.


Let entrepreneurs worry about the response. They have more imagination and incentives than government bureaucrats anyway.




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