Business, Management and Accounting
4 years ago

Prices Drop During Peak Demand, Saving Shoppers Money!

American Economic Review
Why Don't Prices Rise During Periods of Peak Demand? Evidence from Scanner Data
Judith A. Chevalier, Anil Kashyap, Peter E. Rossi

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Prices for products at a supermarket chain actually drop during peak demand times, mainly because the store lowers its profit margins. This happens even if overall demand is high. The idea that stores sell some items at a loss to attract customers seems to be the reason for this. The behavior of the manufacturers doesn't have much impact on this price drop.