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Why do higher prices result in higher profits and not greater supplies?
Wiki User
∙ 13y ago
In the short run higher prices result in higher profits. If demand increases for a crop or a manufactured product, it takes time for an increased demand to be met.
It takes 200 days for a cotton seed to produce a cotton bush with ripe cotton ready to be picked. It takes time to take the cotton to the gin and have the seeds removed. Then the cotton must be turned into thread, woven into material, cut according to a pattern, and then the finished material made ready for sale.
For any product, lead time exists. Only as a product becomes a commodity does higher prices lead to greater supplies. Then producers know there will continue to be a market for the product and the long lead time will not be wasted.
Wiki User
∙ 13y ago
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Who has higher profits walmart or best buy?
Walmart has higher profits because of their cheap prices. most people shop there for good deals.
Why is American Girl getting so cheap in quality while raising their prices?
If that is the case then the answer is obviously for greater profits.
What is a negative effect of government regulation?
they cut into company profits, they stifle competition, they cause higher prices for consumers.
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Prices would go up because companies would need to make the extra money to pay the higher wage and keep their profits.
What is consider a negative effect of governments regulation?
they cut into company profits, they stifle competition, they cause higher prices for consumers.
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Higher gas prices, more tax money.
When monopolistic competition is compared to perfect competition what can you generally expect with reguard to price output and profit?
We can expect that prices are higher, output is less, and profits are high er.
Who has the lowest prices for fishing supplies in San Diego County?
check local basspro or Wal-Mart's to find the lowest prices for fishing supplies in the Sand Diego county. Basspro will be the higher end and Wal-Mart the lower. Check your local yellowpage for other locations.
Protecting American textile manufacturers from Chinese clothing imports lower clothing prices in the US true or false?
"Protecting" American producers lead to lower supplies of clothing in the U.S. and higher prices.
What general statement can you make about the supply of fossilfuels given what you know about their formation?
Fossil fuel supplies are limited and not easily replaced. The principle of supply and demand suggests that as hydrocarbon supplies diminish, prices will rise. Therefore higher prices will lead to increased alternative, renewable energy supplies as previously uneconomic sources become sufficiently economical to exploit.
What does profits stemming from market power reflect?
high prices
Low unemployment rates in the country employers offer higher wage to meet their higher payroll costs and maintain profits they charge consumers more for goods and services what are the consequences?
a wage price spiral of ever-increasing prices
