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0 pointsrefurb6y ago0 comments

Only if demand is entirely in elastic.

You can be damn sure if the cost of mobile phones suddenly doubled, a lot fewer phones would be purchased and companies would go out of business.

0 comments

I was initially going to add something on demand elasticity...

But it is not obvious at all how demand responds to global increases in salary. It tends to increase more often than decrease.

Of course labor makes up a fraction of the total cost of a phone, so doubling your labor costs does not double the unit cost of a phone.

refurbOP6y ago

My comment was in response to “When everybody raises prices at the same time, business survive.”

Which is clearly not true.

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