Price hikes and drops are generally the best economic signals that exist because they are completely public and they depend on people's real buying decisions. Regardless of the motives involved, if companies charge more and people continue to pay it, the market will be flooded with supply until a new equilibrium is reached, because there's money to be made. Gas prices shoot up in disaster areas, then return to normalcy as supply increases.
I'm aware that this assumes a free market, which we don't have in several respects, but it does hold generally true. For example, publishers initially tried to hold the line at high prices for ebooks, but the market has kept things relatively reasonable.
Price hikes and drops are generally the best economic signals that exist because they are completely public and they depend on people's real buying decisions. Regardless of the motives involved, if companies charge more and people continue to pay it, the market will be flooded with supply until a new equilibrium is reached, because there's money to be made. Gas prices shoot up in disaster areas, then return to normalcy as supply increases.
I'm aware that this assumes a free market, which we don't have in several respects, but it does hold generally true. For example, publishers initially tried to hold the line at high prices for ebooks, but the market has kept things relatively reasonable.