Quote:
Originally Posted by GrantMercury
Seriously?
1. Companies charge what the market will bear. Always have. Always will. If raising their prices for any reason (regulations, taxes, increased min wage, or simply a desire for higher profit) results in a price the market rejects, the price will come back down. If they can get away with raising the price as a result of a higher minimum wage - they'd already be doing it and pocketing the extra $$$.
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All that's true in "equilibrium"... changing minimum wage changes the equilibrium... (shifts the supply and demand curves)
on the demand side: some people will have more $$, so their demand for goods will go up... (driving prices up)
supply side: selling goods is now less profitable, so supply goes down... (driving prices up)