alt Hacker NewsThis is wrong on economics, if nvidia can't produce anymore, then they prefer a shortage to equilibrium or surplus in order to sell what they can produce at higher prices.
If they had fully elastic production, or more competitors, things would be different.
If, all else equal, price rises then demand declines. Nobody has an unlimited budget. The higher the price, the fewer people who can maintain their willingness as a buyer. You are in a very unique position if you have never experienced "nope, that's too much money for that, I'm out".
If demand continues to decline then you end up in equilibrium or surplus. The only way to maintain a shortage is to not allow price to rise. Equilibrium is the ideal spot for a business — maximum revenue without having to carry costly inventory.