Like, who decided a carton of eggs cost 5$, or a specific car costs $50,000? I understand some of it is based on raw materials cost, labor costs, etc.
And big manufacturing companies can have market analysis to determine what price to make profits via supply and demand. But for basic commodity goods like groceries that are sourced from farmers and the like, how did they land on a specific number?
In: Economics
Basic economic principles of supply and demand.
If the price is set too low, you get shortages (consumers buy the product, but the shelves are empty because production can’t keep up)
If the price is too high then you lose sales (the product will still be supplied but consumers won’t buy it)
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