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Having a low absolute profit margin compared to other business does not mean that doubling it should not count as price gouging.
by m000 4y ago
Having a low absolute profit margin compared to other business does not mean that doubling it should not count as price gouging.
- bumby 4y agoI think you're misinterpreting my point. If they doubled the price consistently, they would no longer be a low margin business. The fact that they are low margin is evidence that they are not gouging. I think there's also a misperception of the public on a lot of items. Many of the dramatic price increases we see are deferred inflation from not raising prices (and subsequently eating the added supplier cost). We generally don't see steady 2-5% price increases every year, but rather large step increases every few years. Many of those step increases are catching up for the previous years where there was no increase. FWIW, I'm not saying there isn't opportunism going on, but it's much less likely in low-margin commodity businesses.