1 Answer | Add Yours
I assume that this is a follow-up to your question about price gouging after a disaster. I have edited it to show this. The only real way that the supply and demand for these goods could be altered would be for the government to provide the goods itself. This would reduce the demand for goods carried by private firms and would increase overall supply.
It is not really possible to reduce demand for certain products after a disaster. If people's windows have been blown out by a storm, they need boards to cover the holes. If they are without power, they need generators to produce electricity. There is simply no way to make them not need these things. If the government supplies boards and generators, then people will not need to buy them at severly elevated prices.
In many cases, it is not easy to increase the supply of goods. If the roads into an area are washed out, for example, the government will have a hard time getting more goods to that area. This is often what causes supply to be low. Unless the government goes to extraordinary lengths (like bringing things in via helicopter), it will not be able to increase the supply.
So, it is very difficult for anything to be done to reduce demand or increase supply for price-gouged goods after disasters.
We’ve answered 317,950 questions. We can answer yours, too.Ask a question