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Joined 8 days ago
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Cake day: March 2nd, 2025

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  • How about this explanation:

    There is a reduced supply of coffee beans. Let’s say 30%. This requires that 30% of customers have to be priced out of the market.

    If the coffee shop owners only increase the price by several cents then the demand stays the same. They have to fight for coffee beans which drives up their costs step by step.

    However, if they increase the price in advance, and far more than necessary right from the start, then the reduced demand matches the available supply and the value of the coffee beans roughly remains the same which allows them to profit from most of the price hike.