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
You want to sell your house for $600k
But 10 people have submitted offers for $650k-$750k
Why would you not pick one at random, forgo the extra $50k-$100k and enjoy their enhanced purchasing power?
Because supply-and-demand drives prices.
Latest Answers