Why is it that in economics, when demand is greater than supply, prices “automatically” go up? Isn’t it sellers that decide to raise prices because buyers are willing to pay more? Couldn’t sellers choose to not raise prices?
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Prices don’t “automatically” go up, it is still a choice on the part of sellers to raise price.
But for prices not to go up, it would require sellers to act against their own self-interest by selling their products for less than buyers are willing to pay, and that’s a major assumption of most basic economic theories.
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