Evan Davis' recent Evanonomics piece on how markets set prices should be of interest to students, particularly those in Year 12 who have been reviewing their understanding of prices and markets. He examines the energy market and the role of competition (or lack of it) in setting prices. There are some interesting reponses after the article.
An essential read!!
1 comment:
If a firm raises their prices why would competitors follow them by raisng there prices? The article says companies are reluctant to raise prices and that competitors may only raise pricse a few weks later but why would it even be a consideration to raise prices, knowing that their competitors would have lower prices to lure customers and with this being true why would competitors raise their prices to equal the higher price the company sets?
Post a Comment