[londons_explore]

One should consider how futures prices impact this economics model.

This factory could afford to upscale because they could sell their product for a much higher price, and pay their workers much more to do so.

However if they had already sold the factories output for the regular price via a futures contract (ie. 1 ton of polypropylene for delivery in June for $2000), then the story would be different.

Futures contracts are widely used as a way to take the risk out of doing things, but the side effect is your economy loses all incentive to be flexible to changing needs.

[kjshsh123]

If demand increases for PPE (e.g. a righward shift of the demand curve) because of a pandemic, then prices increase but quantity demanded increases as well.

They may have existing futures contracts at the prior price and quantity but if quantity demanded has increased, then that means there are new orders as well that would be at the new, higher, market price.

The article is about them increasing their output. They could have sold the factories previous expected output via a futures contract. That doesn't stop them increasing output and selling in excess of any futures contracts.