The situation here is that there is a temporary supply shortage. If you raise the prices to drop sales and guarantee you have stock it means you priced out most of the people. You narrowed your market only to the few who can afford it and those few are slowly going through that stock.
How does that help the situation? At the end of the day some people will have the bread (because they were in the store early, or because they have money) and other won't.
Raising prices in this situation only helps make more profit, extract more from the existing market. It does nothing to solve the problem of people having bread.
Not in this case. You're citing Economics 101 without addressing the situation from the article.
The current primary supplier had a temporary setback caused by a fire in mid-March and operated at reduced capacity, before going back to full capacity in July. Whatever flexibility competitors had to increase capacity with little to no investment was probably captured. A few months of marginally improved prices won't incentivize any competitor to invest. Hard bread isn't the kind of product that can command a big price before customers lose interest.
Comments
I don't know where you got that honestly.
The situation here is that there is a temporary supply shortage. If you raise the prices to drop sales and guarantee you have stock it means you priced out most of the people. You narrowed your market only to the few who can afford it and those few are slowly going through that stock.
How does that help the situation? At the end of the day some people will have the bread (because they were in the store early, or because they have money) and other won't.
Raising prices in this situation only helps make more profit, extract more from the existing market. It does nothing to solve the problem of people having bread.
Of course it helps, pricing increases make it more attractive to build more supply.
Not in this case. You're citing Economics 101 without addressing the situation from the article.
The current primary supplier had a temporary setback caused by a fire in mid-March and operated at reduced capacity, before going back to full capacity in July. Whatever flexibility competitors had to increase capacity with little to no investment was probably captured. A few months of marginally improved prices won't incentivize any competitor to invest. Hard bread isn't the kind of product that can command a big price before customers lose interest.