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> Everyday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are
by speedplane 7y ago
> Everyday people honestly don't understand why prices are what they are. I've had a number of conversations with people and they truly believe that prices are arbitrarily set based on how much owners want to screw customers over.
Generally, a company will charge the highest price they can get away with, irrespective of the cost it took to produce the good or service.
Prices only approach the cost of production when there is strong competition among industry players. Basic tactics like branding, consolidation, and lack of transparency in an industry help subvert competition.
- imtringued 7y ago>Generally, a company will charge the highest price they can get away with, irrespective of the cost it took to produce the good or service. That's not what those "everyday" people think. They think the company can increase the prices beyond the breaking point arbitrarily and always get away with it. That same logic is then used to prevent new competitors from entering because they charge above market rate during their first few years. For some reason they never think about what happens once the suppliers are begging for customers because there is too much competition.