I keep seeing comments about how companies are having record profits, and consumers are paying for inflationary prices. Can governments regualte profit margins as a form of consumer protection?
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If you put a maximum on the profit margin, then all high profit margin companies will start buying stores, especially grocery stores, to lower their margin and start selling a bit of everything online like amazon to increase their revenue, therefore lowering their margin without needing to reduce the price on their actual products.
Also, high profit margins are needed to pay back the R&D investment and the growth period in which start-ups burn a lot of money, so if they aren’t allowed to get profit margin high enough and unable to reduce them enough through increasing revenue by selling random stuff, they won’t be funded anymore.
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