Something does not match

Friday, April 27, 2007 at 1:30 | Posted in Uncategorized | 2 Comments
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Euro is record high against Japanese yen (AFP) and near the record level against US dollar. How come I am not detecting that Japanese and American products would be any cheaper here than they were before?

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  1. The answer is simple:

    Prices are not made from costs, but from the calculation to get as much profit as it is possible to get. So falling costs due to currency gains are nice to let profits grow, but there is no reason to cut prices as long as there are no new competitors entering the market with lower prices.

  2. Definitely so, Marcel. But if there were something of a competition in the market, the prices would be likely to drop.


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