the concept of inflation. When central banks increase money supply, prices rise..ok. But please explain the underlying mechanics, how do retailers know to increase prices?

Question

the concept of inflation. When central banks increase money supply, prices rise..ok. But please explain the underlying mechanics, how do retailers know to increase prices?

In: Economics

Answer 1

Costs of raw materials rise, so the cost of goods manufactured rises. The cost for retailers to acquire those goods rises, so the sticker prices rise.