What i don’t understand that why the price goes up for finished products, it is already made, raw materials used and manufacturing is paid.
If the store already has 10 TVs in the store, why the price go up?
If you have a given amount of packaged bread already in the store why the price goes up?
Edit1: Lightbulb from many: Restock… You need to restock on current price, if you don’t follow the price you gonna lose money
However the “willing to pay” argument is kind of maddening, because with basic necessities like food “willing to pay” is reversed, controlled by seller and transformed to “have to pay and going to do so”
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A few reasons:
– People are willing to pay more and businesses want to maximize profits. Also, better to reduce number of unhappy customers who can’t get what they want by allowing them to self-select. Maybe demand is for 50 TV’s at $500 and you’ll have 40 unhappy customers. Raise the price to $700, you sell the 10 you have and only turn away 5 unhappy customers, while the other 35 decided on their own to hold off upgrading their TV right now.
– While the store has inventory, they’ll have to pay more to buy replacement inventory. There may be a mix of older and newer inventory on the shelf, but you’re not going to mark 3 TVs from an older shipment lower than 7 newer ones if they’re all the same model.
– When shortages reduce number of units a store gets, they need to make more per unit to cover their fixed costs — whether a store has 10 TV’s to sell or 50 TV’s, the store’s rent, utilities, insurance, labor, etc. are the same. But when they have less inventory to sell, each unit has to cover more of those fixed costs.
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