Most of these reasons are just excuses made by people who simply don't understand, or believe in Capitalism. In capitalism the market sets the price; not the provider. If the prices go up 10%, and the market rejects that price, the prices will go back down to where they were. It's the job of the providers to find the maximum price that the market is willing to pay for the item. What it costs to produce that item has very little meaning.
Of course if that item costs more to make than what the market will pay for it, then the item simply will not be made. However to suggest that changing the cost of the production of the item has any effect on the market price shows ignorance on capitalist principals. I will point out although that if the consumer is earning more money they are willing to spend more on a given item. So if the average worker is making more money of course prices are going to increase on a commodity like Chipotle burritos.
I''m glad you brought this up, I find it impossible to explain this basic concept of pricing to people.
Having said that though, the food service industry is so competitive that margins are pushed down to near zero. So the price of production has more effect on pricing the most other industries.
Most of these reasons are just excuses made by people who simply don't understand, or believe in Capitalism. In capitalism the market sets the price; not the provider. If the prices go up 10%, and the market rejects that price, the prices will go back down to where they were. It's the job of the providers to find the maximum price that the market is willing to pay for the item. What it costs to produce that item has very little meaning.
Of course if that item costs more to make than what the market will pay for it, then the item simply will not be made. However to suggest that changing the cost of the production of the item has any effect on the market price shows ignorance on capitalist principals. I will point out although that if the consumer is earning more money they are willing to spend more on a given item. So if the average worker is making more money of course prices are going to increase on a commodity like Chipotle burritos.
I''m glad you brought this up, I find it impossible to explain this basic concept of pricing to people.
Having said that though, the food service industry is so competitive that margins are pushed down to near zero. So the price of production has more effect on pricing the most other industries.