> Food and clothing depend on other things (cost of employees, equipment, materials, etc.) When the costs of those things rise, the cost of food and clothing will have to rise.
Not really. You're pointing to production costs, but production costs just define the price's lower bound, not the price itself.
Price depends solely on willingness to pay and pricing strategy, which is higher than the production cost when the product/service is not subsidized or a loss leader.
Not really. You're pointing to production costs, but production costs just define the price's lower bound, not the price itself.
Price depends solely on willingness to pay and pricing strategy, which is higher than the production cost when the product/service is not subsidized or a loss leader.