Effects of sudden price increase


It is a knee-jerk reaction for the sales to go down when there is a sudden increase in prices. This is very evident with fuel prices that managers of gas stations would complain of the reduced sales. People tend to scrimp when there is a price increase. On the part of the supplier, the usual remedy is to wait it out until the market prices would stabilize. But when the company is small then the waiting time is not an option.


A surge in prices is one big headache for traders especially when the product is a controlled merchandise in terms of importation. Rice is now a problem by the farmers where it used to be the problem of the public. The cost of ex-farm is dipping so low that the producers are already complaining of big losses. I guess the traders are having a heyday now with the low prices of rice from the farm.