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
> purchasing power of the consumers has increased
… of some people only. Meanwhile the rest can’t afford and start complaining inflation.
To make it worse, the rest have to increase their service charging (earning) to afford, causing chain reactions of inflation (neverending)
Everyone is having flu and bid higher money to buy that 1 medicine, this is far from increased purchasing power, I think.
More like the **supply is really, really bad** and the rest of the people (without enough money) can’t afford anymore.
Edit:
Even if the supplier doesn’t raise prices, the capitalistic scalpers going to buy and resell at higher prices… (There’s always that one guy… that are desperate enough to overpays)
A grocery store is going to relay a lot of companies products. The company sets a base price, division of labor is within the grocery store to mark it up for its own needs.
Depending on the original company, someone is increasing the margins. They are less concerned with how a grocery store would operate which is margins intersecting multiple different companies and products.
Basically company A doesn’t care what company B is doing. But grocery store is going to make a margin regardless.
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