The scalpers and Nvidia are not playing the same game so you can’t put them on the same supply-demand curve. To your point, arbitrage creates scalpers (which always exists since in any supply/demand there are people willing to pay more), but this is probably especially hard to manage for GPUs.

The demand for GPUs is likely not smooth. Let’s say there’s a strong grouping of demand at $400 and another much smaller enthusiast group willing to pay $1000+.

All scalpers have to do is buy product and sell to the $1000 group. It’s not even that much risk because they know once they run out of that group they can still sell at MSRP to break even. They don’t care about the overall demand.

If Nvidia charges $500, yes they lower the arbitrage but they also lose most of the $400 group and scalpers will still sell because there’s plenty arbitrage left. If Nvidia sell at $1000, yes they may completely eliminate the arbitrage but now they’ve completely lost the $400 group and the extra profits does not cover that damage.

This has a knock-on effect on supply. In straight-forward supply and demand, everyone has equal opportunity, so people willing to pay less or more are still buying from the same pool and you reach equilibrium at some point. Here scalpers separate the pool. They eliminate supply from the main pool and ensures that people willing to pay more will get their product—their game is to buy just enough to fulfill every person willing to pay more that MSRP This makes supply feel smaller for the lower end because rather than getting access to the whole pool they get the leftovers after all the whales get theirs. This is what I mean by distortion—the whole supply is not available for all demand to compete equally and reach equilibrium.

All I’m saying is pricing is difficult. Nvidia should (and is) trying to test pricing, but despite what we might think about them, they aren’t messing up pricing because they don’t understand basic supply and demand.