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If one company in an industry faces higher costs, they may not be able to raise prices, as they would lose customers. If all companies in an industry suddenly
by rahimnathwani 2y ago
If one company in an industry faces higher costs, they may not be able to raise prices, as they would lose customers.
If all companies in an industry suddenly face higher costs, that shifts the supply+demand equilibrium.
- naasking 2y agoThey're not just competing against other companies though, they're also competing against piracy which places a much needed downward pressure on prices.
- ryandrake 2y agoEDIT: OK I got educated here. Must drink my coffee before posting next time.
- rahimnathwani 2y agoCompanies don't seek to maximize revenue. They seek to maximize profits. Looking at the demand curve alone does not tell you the equilibrium price. If every point on the supply curve increases by 5%, this will almost change the price at which the supply and demand curves intersect.