I understand that demand-pull type of inflation is a result of companies raising prices when consumers have more money? But why would they raise their prices and not just enjoy the fact that purchasing power of the consumers has increased? Is that a result of some sort of inherent greed that you see an opportunity to get even more money by raising prices? Why not just enjoy the fact that many people can afford your product?
In: Economics
Because more money means more money to do things like expand your business and make more product.
Or, consider that people might have more money because they’re getting paid more, and the business is either also paying more or will soon need to pay more to retain its workforce.
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