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Angel Soft exec explains why toilet paper supply couldn’t keep up with demand when COVID-19 hit — Michael Grothaus

Summary:
In case you were wondering. Toilet paper is a business where we run all of our assets 24/7…, so it wasn’t like there was an opportunity to just say, ‘Oh, just run more hours.’ All the hours were already accounted for. Shows that retail is based on administrative pricing rather than market pricing. Under market pricing with quantity limited, the price would have risen to ration available supply based on price. Would that have prevented hoarding? Would this have been a better solution? An alternative would have been to ration the quantity of product per customer, which some firms eventually did. Fast CompanyAngel Soft exec explains why toilet paper supply couldn’t keep up with demand when COVID-19 hit Michael Grothaus

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In case you were wondering.
Toilet paper is a business where we run all of our assets 24/7…, so it wasn’t like there was an opportunity to just say, ‘Oh, just run more hours.’ All the hours were already accounted for.
Shows that retail is based on administrative pricing rather than market pricing. Under market pricing with quantity limited, the price would have risen to ration available supply based on price. Would that have prevented hoarding? Would this have been a better solution? An alternative would have been to ration the quantity of product per customer, which some firms eventually did.

Michael Grothaus

Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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