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I don't really get what you mean. They are always greedy, meaning they will always set prices at the level that is most profitable for them. Which simplisticall
by NoboruWataya 3y ago
I don't really get what you mean. They are always greedy, meaning they will always set prices at the level that is most profitable for them. Which simplistically means they will increase prices until the impact of higher prices on sales outweighs the impact on margins.
So their ability to set prices is constrained, principally by competition as well as the tendency of consumers to simply do without if the price is too high. When there is more money in the economy (eg, due to lower interest rates), consumers will tolerate higher prices for the same goods. Thus corporations have a greater ability to set prices, and they react, predictably, by increasing those prices.