Maybe my example wasn’t clear; I don’t mean that you would buy a microwave if you already have one, I mean that you will spend your money on something else if you can’t afford the washing machine. Some goods are tightly correlated with each other such that if the price of one goes up (e.g. due to tariff), the price of the other will go up as well because it’s a partial alternative.
The type of market you’re describing…only happens in small, locally focused markets
This is not true; supply and demand applies in any open market, with the exception of monopolies and collusion which I already pointed out. Yes, WalMart/Home Depot/etc engage in anti-competitive business practices, but they still can’t arbitrarily charge whatever they want, which is what it sounds like the Axios article is saying. If they could, then why did they wait for the looming threat of tariffs to raise their prices? Why haven’t they been charging exorbitant prices all along?
Maybe my example wasn’t clear; I don’t mean that you would buy a microwave if you already have one, I mean that you will spend your money on something else if you can’t afford the washing machine. Some goods are tightly correlated with each other such that if the price of one goes up (e.g. due to tariff), the price of the other will go up as well because it’s a partial alternative.
This is not true; supply and demand applies in any open market, with the exception of monopolies and collusion which I already pointed out. Yes, WalMart/Home Depot/etc engage in anti-competitive business practices, but they still can’t arbitrarily charge whatever they want, which is what it sounds like the Axios article is saying. If they could, then why did they wait for the looming threat of tariffs to raise their prices? Why haven’t they been charging exorbitant prices all along?