> If that is the decision they face, that means customers did not want the thing that was sacrificed, and leaving it out is an improvement. This is only true i

> If that is the decision they face, that means customers did not want the thing that was sacrificed, and leaving it out is an improvement. This is only true if you don't take sticky prices into account. It is quite well established that sticky prices screw with efficient market theory quite a bit, and the scenario provided by the gp sounds like a good candidate for a sticky price scenario. edit: After thinking about this a little bit, let me go further. The parent's statement is veering into efficient market theory dogma territory. Causality is much more difficult to determine in macroeconomics than in sciences that have the benefit of controlled experiments. There are significant competing theories to efficient market theory that have things to say about scenarios like this, so a straight declaration of cause without caveats is misleading, particularly since efficient market theory clearly does not hold in many observed scenarios. Above, I'm not saying that sticky prices necessarily are the cause of the results that the gp is describing (or even corroborating that the scenario is something that necessarily happens), I'm just showing that the problem probably isn't as clear cut as the parent suggests.