You ill find many many people do not have a problem with businesses recovering costs when rates increases but that is just it, they should only be covering their costs but they don't, they put a bit extra on to get more profit than they already are and that is the problem many many people have when they see businesses raise their prices, it's all being done in the name of greed.
This is just an example of how people see it. A business currently charges $20 for an item. The business is already making a profit because they buy in the item for $6, then factor in business costs that push the cost to $19, they then add $1 to make a profit. Suddenly things go pair shaped in the world, energy companies increase their prices and everyone then compensates the energy price rise by raising their own prices. Now if the business raised their prices to cover the costs of the price rises to say something like $26, the business should still be making that $1 in profit but they don't because they use the external price rises to add on a little bit extra so instead of making the $1 profit, they increased it by $3. The original cost to the business being $6, the external price rise bringing it now to $9. The business put their own business costs on top of that which have slightly increase now making it $23 but instead of adding the $1 to keep the existing profit, they've now increased it to $3, making the total cost of the item $26.
This is how businesses are making their huge profits on increases in inflation, they are adding a little bit extra on top of the increase in costs to make more profit and people are falling for it.
This is just an example of how people see it. A business currently charges $20 for an item. The business is already making a profit because they buy in the item for $6, then factor in business costs that push the cost to $19, they then add $1 to make a profit. Suddenly things go pair shaped in the world, energy companies increase their prices and everyone then compensates the energy price rise by raising their own prices. Now if the business raised their prices to cover the costs of the price rises to say something like $26, the business should still be making that $1 in profit but they don't because they use the external price rises to add on a little bit extra so instead of making the $1 profit, they increased it by $3. The original cost to the business being $6, the external price rise bringing it now to $9. The business put their own business costs on top of that which have slightly increase now making it $23 but instead of adding the $1 to keep the existing profit, they've now increased it to $3, making the total cost of the item $26.
This is how businesses are making their huge profits on increases in inflation, they are adding a little bit extra on top of the increase in costs to make more profit and people are falling for it.
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