[r9etb]

Yes. Higher prices encourage conservation and provide incentives to increase supply. They also allocate use to the highest valued users.

This doesn't work: you're applying long-term market considerations to an intrinsically short-term problem.

[Paleo Conservative]

This doesn't work: you're applying long-term market considerations to an intrinsically short-term problem.

It works in the short term too. If a store only has 500 gallons of gasoline, does it sell it to the first customers who come along? If consumers fear a shortage, people could start hoarding by filling up their tanks. If the price remains the same as prior to the disaster, the store quickly runs out of fuel. Then no fuel will be available at any price. Also, those who filled up before the store ran out would be in a position to sell fuel from their gas tanks on the black market.

[SC Swamp Fox]

you're applying long-term market considerations to an intrinsically short-term problem.

I disagree. If the market price of water in southwest Florida is $20/gallon, I might just take a few days off work, rent a U-Haul and drive a couple thousand gallons down.

Price caps have the opposite effect. If I own an ice company, do I really want to pay my people overtime and buy gas for my generator if I can't charge a higher price for my product to help cover my increased costs?

[LincolnLover]

"This doesn't work: you're applying long-term market considerations to an intrinsically short-term problem."

Bingo.

Silly economist who can't see the forest for the trees bump!