4 ms·
It would be more accurate to state that consumer demand (as there is a bunch of excess savings sloshing around from Covid) is driving up market-clearing prices.
by SamReidHughes 4y ago
It would be more accurate to state that consumer demand (as there is a bunch of excess savings sloshing around from Covid) is driving up market-clearing prices. Profit margins don't increase prices.
- EdwardDiego 4y ago... you're going to have to run that past me again. If my cost of producing a gubbin is X, and I sell it for X + 5% margin, then start selling it for X + 15% margin, then the price will increase. Seems straightforward, what am I missing?
- NoboruWataya 4y agoYou're missing the step between offering the gubbin at X+15 and selling it at X+15 - namely, the part where someone agrees to buy it. Why weren't you selling at X+15 yesterday, and why aren't you selling it at X+50 today? Did you just wake up this morning feeling greedier than usual (but not too greedy), or could it be that there is some external constraint on your ability to set prices, and that constraint has changed?