Eli5, Why do people raise prices during inflation?

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Doesn’t that make inflation worse?

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40 Answers

Anonymous 0 Comments

The products they’re buying is costing them more as well. If they sell a product that costs $9 to make for $10, but now it costs $11 to make, they’re going to necessarily have to raise the price to $12.

Anonymous 0 Comments

Businesses raise prices because they want money. People raise expected wages because they want money and now the things they need/want cost more.

Goods get more expensive because of this.

*However*, if goods did not get more expensive, then there would be a shortage. Inflation happens when there is too much money compared to how many goods exist, so if prices do not go up then people will try to buy more goods and run out.

Anonymous 0 Comments

I think you have it backwards. Inflation is the rising of prices, and the reduction of spending power. It’s not a reaction to inflation, it is the inflation.

Anonymous 0 Comments

Eventually a business has to when their own costs increase.

If I normally buy something for $1 and sell it for $1.10, and my supplier changes their price to $1.10, either I have to raise my price or else I’m not making any money off it

Anonymous 0 Comments

The price raising is inflation. If the materials you’re buying to make stuff to sell become more expensive, then you’d want to raise prices as well so that you can earn as much as you did before.

Anonymous 0 Comments

They aren’t concerned with the impact on inflation, instead the costs that the workers are having to pay in the shops has gone up so to keep the workers from losing out they raise workers wages, in addition fuel, electricity and other costs also have been rising so they raise the costs of the goods that they provide to maintain the profit margin.

Anonymous 0 Comments

The products they’re buying is costing them more as well. If they sell a product that costs $9 to make for $10, but now it costs $11 to make, they’re going to necessarily have to raise the price to $12.

Anonymous 0 Comments

Businesses raise prices because they want money. People raise expected wages because they want money and now the things they need/want cost more.

Goods get more expensive because of this.

*However*, if goods did not get more expensive, then there would be a shortage. Inflation happens when there is too much money compared to how many goods exist, so if prices do not go up then people will try to buy more goods and run out.

Anonymous 0 Comments

I think you have it backwards. Inflation is the rising of prices, and the reduction of spending power. It’s not a reaction to inflation, it is the inflation.

Anonymous 0 Comments

Eventually a business has to when their own costs increase.

If I normally buy something for $1 and sell it for $1.10, and my supplier changes their price to $1.10, either I have to raise my price or else I’m not making any money off it