78
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 29 May 2024
78 points (90.6% liked)
News
22831 readers
4168 users here now
Welcome to the News community!
Rules:
1. Be civil
Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban.
2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.
Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.
3. No bots, spam or self-promotion.
Only approved bots, which follow the guidelines for bots set by the instance, are allowed.
4. Post titles should be the same as the article used as source.
Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.
5. Only recent news is allowed.
Posts must be news from the most recent 30 days.
6. All posts must be news articles.
No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.
7. No duplicate posts.
If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.
8. Misinformation is prohibited.
Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.
9. No link shorteners.
The auto mod will contact you if a link shortener is detected, please delete your post if they are right.
10. Don't copy entire article in your post body
For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.
founded 1 year ago
MODERATORS
The only reason they're doing this is because they realized they'll make more money by lowering prices. Do not mistake this as good will.
I'm going to use fake numbers here for the sake of simplicity to explain a concept of what just happened.
2020 absolutely had inflation from multiple different reasons. But......most of those reasons were temporary, which have now resolved.
So, here's where those fake numbers come in.
Lets say 2019 prices were around a 5% inflation. There is no covid. It's the last year of normal life. Stores aren't going crazy.
2020 comes, all hell breaks loose. Actual inflation is now at 13%. But stores are trying to figure out how to stay alive. So they charge as if we're at 22% inflation. This massive jump makes consumers buy considerably less. Spend more currency, but buy less product.
The end result is these companies made record profits selling less.
And then the work shortages caught up. The shipping shortages caught up. The microchip production resumed. And that temporary actual inflation fell. But because our country has never had a situation where inflation might fall, stores have just kept charging that 22% inflation prices, even though they're paying maybe 7% inflation now. A realistic jump considering everything thats happened.
Meanwhile consumers are seeing gatoraide shrink from 32 to 28 oz, and instead of charging $1.25 for it, it's being sold for $3. And consumers are saying "I'M NOT PAYING MORE TO GET LESS!"
And so stores are probably going to drop that $3 to $1.75. You're still paying more and getting less, but that $3 price is in your mind now so you think you're paying a normal fair price, rather than getting ripped off compared to 5 years ago.
So instead of charging 22%, now the artificial inflation is at 16% while actual inflation is 13%. They're still ripping you off, but now they want to continue to rip you off. Can't rip you off if you buy nothing.
This is what's actually meant by the "invisible hand." They pushed prices past what the market was willing to bear, and lost sales as people made do without. Now they're adjusting prices back down, because it makes more sense to accept a smaller margin and make it up in volume. It's a textbook example of the demand curve in action.
When market-based systems work, they work fairly elegantly. It's the cases where they break down that I get concerned with.