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
The capitalist economic system is built on the assumption that every actor is always acting in their self-interest. In a system like this, what *is* greed? Every company is assumed to be trying to maximize profit, always. ‘Greed’ is the basic underlying assumption of all modern economics.
Why would someone, who’s entire career revolves around making the most money possible for their employer, *ever* just sit back and leave money on the table? Why would shareholders, who already have more money than is possible to spend but constantly accrue more anyway, *ever* tolerate an executive employee who makes less money for them than a different executive could?
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