Remember that retailers are in competition. If Food Lion raises it's prices and Aldi does not, then Aldi magically gets more customers. Neither grocery store is motivated to become the High Cost Loser.
I addressed that below:
it seems to me that retailers currently have margins that competition could eat into, but doesn't. If one of the factors keeping margins above epsilon is the amount of money people are willing to spend, then an increase in that would presumably also increase margins.
Also consider that retailers do in fact have different prices. Instead of Sainburys raising prices, we might find Sainsburys starting to get edged out by Waitrose. (This feels sketchy to me, especially since it's least likely to happen in poor areas, and I'm not about...
This thread is for asking any questions that might seem obvious, tangential, silly or what-have-you. Don't be shy, everyone has holes in their knowledge, though the fewer and the smaller we can make them, the better.
Please be respectful of other people's admitting ignorance and don't mock them for it, as they're doing a noble thing.
To any future monthly posters of SQ threads, please remember to add the "stupid_questions" tag.