Price Changes Everything – September Market Commentary

Why does price change everything?  When product and service prices are rising, there is a point when buyers diminish.  Economic value ceases to exist.  That is, unless the item is very critical to meeting important needs, then higher prices know no upper bound.  Take oil prices – rising too quickly curbs driving habits; some businesses tack on fuel surcharges.  If the price rises too much, then alternative product or service choices may be pursued (again with oil prices – one seeks alternative transportation options – bus, fuel efficient car, or electric vehicle); or other competition enters the picture wherein more supply promotes prices to slide.  Shortages can cause prices to rise, often in huge ways.  Currently, shortages of computer chips exist because of supply chain and transportation challenges.

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