[eesmith]

Companies charge as much as they can, not how much it costs to produce plus fixed overhead.

They likely already charge what the market will bear, to maximizing revenue, such that increasing the price lowers revenue. Raising the price by 5% as a straight pass-through means lowering total revenue. Depending on the elasticity, the consumer price change could be 0 (assuming no one will pay for a higher price), but is almost certainly less than 5%.

[mike_d]

> Companies charge as much as they can, not how much it costs to produce plus fixed overhead.

Companies will sometimes overtly pass a cost on to the consumer in the hopes of creating political pressure against that cost. For example take a look at your phone or cable bill and how they itemize every tax and fee they have to pay and pass along to you.

[eesmith]

And have those itemized breakdowns resulted in political pressure to change things?

If one of those taxes were removed, do you think the overall cable bill would actually go down, and stay down?

[votepaunchy]

Yes, in a competitive market, but when the entire industry is hit with a new exogenous expense then this is much more likely to be passed on to customers.