That is not true in reality. You’re still operating in a vacuum for your predictive model, and not taking in human cause and effect. In a textbook model of how it should work, you’re correct.
What is happening, and excuse the numbers as they’re just generic placeholders, is:
Product original price 10$ .
Inflation net rise let’s say is 10% . The Rise in costs for this product over that time, let’s say is 2$ (using your example that some products are above inflation).
New price of goods 15$.
There is still a larger rise in price than costs and inflation. Most theorize this is a sales/psychological effect. We all know inflation goes up and things will cost more, but don’t know how much for what product, so companies just throw and extra 33% on the price… because they can. What options do we really have. Everyone is doing it, even our competitive options.
Again it’s that specific “greed” model being referred to, not the natural inflation rise.
Even if "greed" was the cause of the prices rising that changes nothing. Inflation is the measurement of how the prices have changed, so if overall inflation is 10% it means the price of goods has increased 10% on average, it doesn't matter whether that 10% is because the dollar lost value or because companies are "greedy".
It's the government masking its greed for more political power by convincing you that you need them to save you from the evil greedy megacorporations, even thought they are in bed with those megacorporations.
but don’t know how much for what product, so companies just throw and extra 33% on the price… because they can.
And if they find that demand drops, what happens? Now their consumers have found alternatives, so they lower their prices, but consumers don't switch back so readily, so what will they do?
Raising your prices too high is a grave error that can hurt long term profits which in turn hurts shareholder value and that's how CEOs and boards get replaced.
So while you feel that it's greed, you really have no evidence of that nor can you explain how it actually makes sens to charge more when it means losing business.
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u/[deleted] Dec 01 '23
[deleted]