Reply To: Market Clearing Prices vs. “Low Prices Always”


I agree with you. Given that we don’t know all the details of the case, we may be wrong. But it seems likely that Wal-Mart anticipates that keeping its prices low and steady is preferred by customers over time than adjusting prices upward opportunistically. Additionally, it may be that Wal-Mart has long term contracts with it’s suppliers or prior agreements with them not to ask higher prices opportunistically during the term of the contract. It is the case that other retailers have raised their prices and maintain ammunition on their shelves. I’ve also read that at least one manufacturer is building a new, large production facility. So, the market seems to be coming around to the view that the increase demand is not just temporary.