Prices mean something.
When prices are moving up, it means supply is limited relative to demand and that profit can be made by bringing in more supply.
Few markets show this as well as gasoline.
Without being too specific, my day job involves helping gas/diesel distributors keep gas in their gas stations.
When there is a short supply of gasoline, they raise the wholesale price. This price filters to the gas stations and then people do actually drive less. This actually reduces the consumption of gas and lets the supply catch up.
In the case of a natural disaster, "gouging" is a critically important market function. If gas stations were allowed to raise their prices to say, $10 per gallon, then people would just buy a few gallons instead of a full tank to get out of the disaster area. This allows more people to get the needed gas and they will conserve it instead of squander it, ie, buy a full tank, get out of the disaster area, then drive on that same gas for a week while out of danger. Meanwhile, someone else is stuck in the disaster area because the station is out of gas.
Also, many distributors of gasoline operate regionally. If there is a hurricane trashing New Orleans and that causes a gas shortage, it is not economical to ship gas from say, Oklahoma to New Orleans at $4 a gallon (more realistically, shipping gas from Texas to Louisiana and from Oklahoma to TX). You would lose money at $4. But if they could "gouge" and charge $10, now all of the sudden it works to shuffle that supply around. Then people get gas.
Same deal for water in a disaster. Its not worth it for someone to load up an 18 wheeler full of bottled water and shipping it do a disaster area unless they can charge an appropriate price.
In summary, relatively high prices simply mean we need more supply of something. The higher prices allows more supply to be delivered profitably and limits waste.
