3 ms·
Which is why they are already charge the price that maximises their profits. If they charged more the increased profit per unit would be more than offset by low
by graemep 7mo ago
Which is why they are already charge the price that maximises their profits. If they charged more the increased profit per unit would be more than offset by lower sales.
A good diagram of supply and demand with monopoly pricing power us the easiest way to explain this. I cannot find a good one online that shows the effect of tariffs though. In essence its worth losing some profit per unit to avoid losing too many sales.
- surgical_fire 7mo agoMedicines typically have inelastic demand, which is why it needs heavy government regulation. Look into what happened with Insulin prices in the US in the recent past for a lesson on that.
- graemep 7mo agoIf demand is inelastic why have they not raised prices already?