Doesn’t that make inflation worse?
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It starts with too much money, then a shortage of supply.
If you’re selling apples for 1$ each and you have 200 apples, you might be selling 15 apples a day for 1$ each and you can get more. But then I come along with 200$ and just buy all your apples. Now no one else can buy them, but the next person who comes along REALLY needs the apples, he’ll pay 2$ for each one, so you raise the price.
The other half of this is maybe the price of your fertilizer doubles, and you double the amount you have to pay people to work for you. Now the apples cost 1.20 to grow each, up from 80 cents each. Are you going to keep charging 1$? You have to raise your price and hope people buy them at the new one, otherwise you’re losing money.
So theres MANY reasons prices go up during inflation, but most of it is that the costs go up to begin with.
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