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PussyStapler t1_ist6x7x wrote

I see inflation and increase of costs of components/materials commonly mentioned as causes for increased prices.

Most companies don't base price on what it costs. They base price on what the market will bear. If it costs them $80 to make headphones that sell for $100, and manufacturing costs went up, so it now costs them $90 to make headphones, they will still sell at $100, because that price was presumably optimized for demand and their marginal costs. They just make less money. If they increase price to $110, then they will sell fewer headphones, which could decrease revenue.

If price went up purely due to inflation, then the price would have gone up comparable to inflation, and people probably wouldn't care that much.

They are increasing the price because they have discovered that they will make more revenue at $150 than $100. So if they sell 150 headphones at $100, and 120 headphones at $150, they will make more money at $150. They may also find it's cheaper to make fewer headphones.

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