My suggestion is that gouging takes advantage of the entire scenario, that it takes advantage of people's fear of not getting it. I like to think existing profit margins should incentivize sellers to have enough. If they can't supply demand at the usual prices, who will fill the gap by gouging? If the battery and milk shelves are empty, they should be getting supply to fill them. If they're able to gouge, they're incentivized to create scarcity. While there can be arguments that other retailers will undercut attempts like that, I don't trust that they will. It doesn't take coordinated price fixing to see the dollars in making people afraid and in the store to buy generators, batteries, and milk. Have a healthy supply of them but only put a few out on display, triple the price, and keep restocking every fifteen minutes and they'd probably make out pretty good regardless of what other stores are doing.
This is purely a resource allocation problem, do you allocate resources randomly or do you allocate them based on need/demand. A person that needs to run a sump pump to prevent flooding is going to be way more likely to pay 3-4x for a generator than some who wants to watch football and have cold beer. If you put a price ceiling than it’s going to be random luck on who gets the generator and it won’t be assigned to where it does the most good. Some bleeding heart liberal will of course say that poor people live in lower areas, poor people are less likely to evacuate so poor people are being price gouged so it’s not fair. And yeah life’s not really fair but we don’t currently have a better way to distribute resources based on need. What will likely happen is that all the generators will either get bought by people that don’t need them or scalpers for the secondary market and the person that really needs one will either have to pay even more on the secondary market or not be able to get a generator at all and sustain huge avoidable losses. So instead of a shitty situation to the tune of $1000 for a overpriced generator someone might be out 50-100k in flood damage