Re:Analysis finds Australia’s inflation being driven by comp...
by gruez on Friday February 24, 2023 @07:56PM
(#34932512)
>And why not? Your products are in demand and there are buyers who are willing to pay more than the theoretical market price.
What do you mean "theoretical market price"? What you're saying makes no sense in the context of standard microeconomic theory. If supply is constrained, then microeconemic theory predicts that the market clearing price will go up. Companies can always price their goods at higher than the market clearing price, but microeconomic theory would predict that doing so would result in less profits.
>But when its driven by external factors
What do you think the "external factors" are here? Companies suddenly getting more greedy?
What do you mean "theoretical market price"? What you're saying makes no sense in the context of standard microeconomic theory. If supply is constrained, then microeconemic theory predicts that the market clearing price will go up. Companies can always price their goods at higher than the market clearing price, but microeconomic theory would predict that doing so would result in less profits.
>But when its driven by external factors
What do you think the "external factors" are here? Companies suddenly getting more greedy?