Inflation affects pricing strategies from "summary" of Macroeconomics for Business by Lawrence S. Davidson,Andreas Hauskrecht,Jürgen von Hagen
Inflation can have a significant impact on pricing strategies for businesses. When prices rise across the economy, companies are faced with the challenge of deciding how to adjust their own prices in response. This decision is crucial because it can affect a firm's competitiveness, profitability, and overall success in the market.
One way that inflation affects pricing strategies is through cost-push inflation. As the cost of production increases due to higher input prices, such as raw materials or labor, businesses may be forced to raise their prices to maintain their profit margins. This can lead to a higher overall price level in the economy, as firms pass on these increased costs to consumers.
Another way that...
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