Business firms have an easier time explaining price increases when those price increases are in response to:

Question

Quizplus · Accepted Answer

When prices increase due to higher costs, it is understandable to consumers as they can relate to the increase in input costs such as raw materials, labor costs, or transportation costs. On the other hand, price increases due to higher demand, unfair taxation, or lack of competition may not be perceived as justified by the consumers.

Business Firms Have an Easier Time Explaining Price Increases When