Doesn’t that make inflation worse?
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1) a shop raises prices because their supplier just raised their price 10%
2) and, if inflation continues, or is expected, the shop raises their price because they know, or at least believe, the next shipment will be higher
Suppose you were a family owned gas station, buying gas for $0.90/gallon and selling at $1.00. If your supplier goes up to $1.00, you have to go to $1.10 on the next load. Also, it will take all of this months proceeds to buy the next load, and you will have made nothing for the month.
But if you know the next month it will cost $1.10 to replace it, do you go ahead and raise prices now, so that you will have made something for the month?
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