The extent to which a business can pass increased costs on to customers varies a lot with the industry. A business where customers have close substitutes (I can stay in a bed and breakfast instead of a hotel, I can order stuff online instead of buying it at a store, I can cook for myself rather than eat out, etc.) can't afford to raise prices much, or else they lose customers altogether. "It's not delivery, it's DiGiorno!" If there's no close substitute, a business can pass most of a cost increase on to its customers.
no subject
Date: 2007-02-16 12:46 am (UTC)