Quote:
Originally Posted by GeoPoto
I would think every business that has more orders at current prices than it can satisfy, raises its prices. Higher prices help "maximize" profits in the short run, help allocate the available capacity to the customers that value it the highest (it is misleading, but accurate to view this as "trying to drive customers away"), and provide the incentive and investable capital necessary to expand capacity in the longer term. I'm not sure why you view this as inconsistent with Economics 101.
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+1.
With a 6-10 month backlog at every tpg, they have more business than they can handle. Keeping prices low will perpetuate that problem. PSA just hired a bunch of new graders. In time, when they catch up, and need more business to keep all of those employees busy, they can bring prices back down to encourage orders. In other words, Eco101 - supply and demand.