It’s Econ 101, but you’re also doing the equivalent of a physics problem ignoring friction. Things are never quite that simple. Here’s an example that I have

It’s Econ 101, but you’re also doing the equivalent of a physics problem ignoring friction. Things are never quite that simple. Here’s an example that I have from a good source: Early on in the pandemic grocery stores started charging more for one food company’s products. This is a major, national brand. They hadn’t raised prices and the stuff they make wasn’t the kind of thing that flew off shelves like bread and tortillas did back then. For many months this continued until the company said “screw it” and raised their own prices to match. Clearly the competition between grocery stores didn’t have an effect. While the food producing company might have worried about the higher prices leading to less sales they couldn’t really do anything about it and decided they might as well take the profits instead.