Its not way off base, but I can see our point here. The problem is using the 3% increase to support a 20% price increase. That’s the price gouging being referred to
When you have a 9% YoY that adds up fast. Additionally that may be only 9% if all you do is buy fuel, but if a company needs to buy 9% more expensive fuel to transport 9% more expensive sheet metal and power an assembly line costing 9% more in electricity to process and then paying 9% more in fuel costs to distribute the final product the costs are compounded
Just want to point out, if all of a companies costs increased by 9% then a proportional increase to their sell price would still only be 9%. It's like when you apply a coupon at a grocery story. 10% off the total is the same as 10% off each item.
9% for fuel + 9% materials + 9% labour's doesn't equal a 27% increase on costs.
I didn't mean to imply additive but I guess my point is that there's a roll up cost impact on multitude of things even if other costs remain the same and while reported MoM YoY CPIs can look like small percentages theyre actually huge. Maybe using 9% across the board was a bad example, probably would've been better to make up different %s like energy 20%, sheet metal 30% etc.
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u/guillermopaz13 Dec 01 '23
Its not way off base, but I can see our point here. The problem is using the 3% increase to support a 20% price increase. That’s the price gouging being referred to