| > That's exactly my point.. You can't change the price without changing the volume.. and that's why you cant pass on costs. In an elastic market. This is not true in non-elastic markets. Obvious example is the price of ERs in the US. Pricing doesn’t impact volume in a meaningful way, because people don’t decide get injured based on how much an ER costs. > The item is already priced at the optimal point in the price-demand curve. This is a bold claim. You’re gonna have to provide some evidence that every item in world is somehow priced at the optimal optimal point on the price-demand curve. > The only companies that are able to do that are the ones that haven't priced their goods correctly to being with. You are correct. But pricing at the optimal points is the rare exception. Most items aren’t priced at the optimal point, because discoing the optimal point is incredibly difficult, and not a requirement for a profitable business. > You seriously think consumers know when the prices of the inputs for an item change? No, that’s quite obviously not what I wrote. I think consumers perception of value increases as prices increase. You seem to have a great deal of difficulty identifying the differences between theoretical perfect behaviour, and reality. Very few things in the real world closely match their theoretically perfect behaviour, so theirs inefficient and market gaps everywhere. Something things like interchange can capitalise on. If you’re gonna come back with another response about how this doesn’t work in a perfect market, then I recommend you don’t waste your time, I’m not interested in debating if reality and theory match. |