0.1% inflation for March

Yeah, your characterization is not accurate, but a common refrain from those on the left who are hostile to capitalism in general, and don’t understand economics.

Profits are a function of supply and demand. If Coke can raise prices, and people still buy it, why wouldn’t they? People can buy Pepsi or RC or generic cola if it is an issue for them. A company that fails to maximize its long term profits, while adhering to applicable laws, regulations and norms, would be failing to carry out their responsibility for shareholders.

As to controlling wage increases. Pretty much everybody wants workers to have rising wages….on a REAL basis. However, rising NOMINAL wages is a sign that inflation has been baked into wage expectations, and is going to be harder to control inflation. As long as employees are expecting higher wages, then companies will continue to need to raise prices.

It is possible to have a goal of rising real wages, due to productivity gains, but recognize that rising nominal wages during inflationary times will likely prolong the inflation.

 

Well certainly what you are actually thinking is meaningless to me. Right-wingers base their view of the economy on whether it's a D or an R in the Whitehouse.

 

It's pretty simple. If profits are increasing at a higher rate than inflation, then increased profits are one of the reasons for the inflation.

 

Sigh.

Profits increasing are a result, not a cause. Profits via higher prices increase due to changes in supply and demand. They don’t increase in a vacuum.

Recent inflation was a result in shifts in both supply (Covid supply chains( and demand (fiscal and monetary stimulus). Such price inflation will lead to higher profits, all else equal.

A material chunk of the higher corporate profits was due to energy, which are global markets where prices are set by global supply and demand.

 

Not talking about profits simply increasing. Talking about profits increasing at a higher rate than inflation. If that occurs, increased profits are one of the components of higher inflation.

 

If supply suddenly decreases, and demand remains the same, prices will go up. The costs don’t initially go up, but the price does, so profits increase more than inflation.

Look at oil prices. If there is a supply shock, prices shoot up. Do their expenses shoot up too? No. So most of the price increase flows to profits.

Over time the costs will increase too, and supplies will adjust due to the increased demand.

 

Well if that happens the increase in profit contributed to the increased inflation. It's basic math. Let's say a company sells a thing for 2 dollars that costs it 1 dollar to make. That means 50% of the price of the thing goes to profit. If for whatever reason the company raises the price of the thing to $4 and now makes $2.50 in profit for each unit sold, now 62.5% of the price of the thing goes to profit. And the price increased 100% but profits increased 150%. So the increase in profit is one of the components of the increase in price.

 

You are calculating the difference between two numbers and he is calculating the percent of change.

Solution for What is the percentage increase/decrease from .02 to .048:
(4.8-2):2*100 =

(4.8:2-1)*100 =

240-100 = 140

Now we have: What is the percentage increase/decrease from .02 to .048 = 140%

 

“At what grade level should a child in America learn this level of mathematics?”


LOL

 

I understand perfectly how capitalism works. And of course coke CAN raise prices to make more profit if demand is there. But there is this argument of social good that needs to be a part of capitalism or the pursuit of max profits is going to bring down the whole system. Just because they can doesn’t mean they should. This is the thing conservatives don’t understand, and certain economists just want to avoid discussing altogether. The system when left to the whims of human greed will literally eat itself, taking as much from consumers as possible while giving as little back as possible. It’s not sustainable. The excuses that they have to look out for shareholders doesn’t hold water anymore - especially when big companies like Coca Cola are primarily owned by institutions and other companies. Only 28 percent of Coca Cola stock is owned by the general public and most of that is in the hands of a few. The system is out of balance.

 

Partially correct gotta look at the profit margins

CocaCola Profit Margin 2010-2023 | KO

 

Something that needs to be mentioned is no one has to buy Coca Cola. It’s not a necessity except for a business selling mixed drinks where regular coke is preferred and it’s still a choice where patrons have other options.

Talk about food and you get my attention.

 

I stopped buying coke. We can afford it but I'm petty and blaming the cost increase on aluminum costs while beer and generic sodas increased at considerably lower levels irritates me. Coke is somewhat honest at least when they admit they won't adjust prices as long as consumers don't change their buying tendencies. Most people are slaves to their cravings so I can't fault them for joining the money grab I guess.

 

Who do you think those institutional holders represent? Outside of Berkshire it’s mostly 401ks, pension funds and everyday investors who don’t buy individual stocks but instead own mutual funds.

 

Yep, 60% of Americans are “right-wingers.”

 

If you’re Coca Cola, why would you drop your prices if people are still buying your product at a more profitable rate? It’s not exactly hard to stop drinking Coca Cola. This mindset really makes no sense, unless you’re a communist. And I don’t say that as an insult. It’s just the only way the thinking makes sense.

 

Yeah, I mean seriously. Where does it end if we’re complaining about Coca Cola prices? Should I be complaining about how much candy costs too?