Are we sure this is economically unreasonable? I think this happens in many financial systems; all you need is for a price increase in one place to cause cost increases at a delay (ie, fast inflation), eg: by workers getting paid more so they can afford the aforementioned price increase.
(We should also note there are markets that don’t do this. Air travel is a notable example.)
More interesting to me is price spikes when there’s no actual increase in costs. Several of those as of late.
Prices go up, governments react to help the industries that take the money but fail to lower the prices for consumers, it happens time & time again. Even if the benefit is passed onto consumers it never returns to the pre"whatever" price, it is always slightly higher. Can you think of a thing that got a price hike that then returned to the same price, or less?
I gave an example, no? Flight prices (on legs with a low-cost-carrier) are quite cost responsive, and have certainly raised and lowered back to where they started.
I’d consider that as more of a luxury item where they have to be responsive or lose a lot of money. Food on the other hand, everyone’s gotta eat, those are the ones seem to only ever go up & up, & drops are still above original.
Are we sure this is economically unreasonable? I think this happens in many financial systems; all you need is for a price increase in one place to cause cost increases at a delay (ie, fast inflation), eg: by workers getting paid more so they can afford the aforementioned price increase.
(We should also note there are markets that don’t do this. Air travel is a notable example.)
More interesting to me is price spikes when there’s no actual increase in costs. Several of those as of late.
Prices go up, governments react to help the industries that take the money but fail to lower the prices for consumers, it happens time & time again. Even if the benefit is passed onto consumers it never returns to the pre"whatever" price, it is always slightly higher. Can you think of a thing that got a price hike that then returned to the same price, or less?
I’m sure it must happen but I’m not seeing it.
I gave an example, no? Flight prices (on legs with a low-cost-carrier) are quite cost responsive, and have certainly raised and lowered back to where they started.
I’d consider that as more of a luxury item where they have to be responsive or lose a lot of money. Food on the other hand, everyone’s gotta eat, those are the ones seem to only ever go up & up, & drops are still above original.