Why is it when gas prices raise, all the other companys raise prices? Why can't they just suck it up instead?

Question

Why is it when gas prices raise, all the other companys raise prices? Why can't they just suck it up instead?

Answer 1

Good question.

Answer 2

The price a company charges for it's products is based on the cost of it's expenses (such as electricity, insurance, payroll, etc), the cost of it's supplies, and an amount for profit. By expecting companies to keep their prices stable in spite of rising costs, you are basically asking companies to operate at a loss.

The whole purpose of operating a business is to earn a profit. If you removed the profit incentive, you remove the who purpose for being in business.

I should also add, that depending on the cost increases, if a company did not raise prices, they would not generate the necessary revenue to pay suppliers so they can stock their shelves or to pay employees and other costs.

Answer 3

The rising cost in fuel triggers a domino effect. The companies that jack up their prices also have to deal with high fuel costs for shipping and receiving their products. It cost them more money to bring you their goods. Plus many large companies produce their product in foreign countries. Where fuel costs are far more expensive than in the U.S.

Answer 4

because they CAN.... and we are FORCed to suck it up instead

Answer 5

Ah b/c the US is in an economic downward spiral we cant pull out of with Bush as president and gas companies so powerful. The other companies are selfish, like the gas ones, and want profit, so they lurk under gas's shadow trying to get the crumbs from its profit feast. The Alternitive fuels can stop all this, if the new president and politics and general can change for the better. And Sorry for being pessimistic but with the way the world works, we wont resolve it until a massive number of people start to die, or until The Threat of death is breathing down our neck's

Answer 6

because it is then costing more to ship the items that they sell to the store so you can buy them.  Gotta cover costs somehow.