| > I always assumed that you priced a good based on what it cost to produce plus some reasonable amount of profit that would allow you a nice home and car. That is completely reasonable if you own and run your own business. But most businesses aren't owned by the people running them. The owner doesn't care what happens, they just have $X and want that money to grow a small % every year. The way that's gonna happen is if the business they bought with that money grows a small % every year. The board, the CEO, the managers, the VPs, they all work to make that % increase happen, whatever it takes. If they can't make it happen, they get fired. If they need to increase prices for that, that's what's going to happen. If they need to milk people, cut corners, move manufacturing overseas, whatever it takes, they will do it. If they don't, someone else will. The owner's money must grow. And "owner" doesn't have to be some fat cat evil billionaire. It's also the retiree living off their 401K savings. It's the 20-year-old starting their contributions. It's the employee pension fund that is there to protect employees. P.S. I'm positive none of this is news to you or anyone reading it, but I love talking about this sort of thing. |