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0 sats \ 4 replies \ @Undisciplined 12 May \ parent \ on: Apple Faces $1.4 Billion Tariff Impact, Smartphone Prices to Rise econ
Cutting production is part of the slope of supply curves.
But adjusting output in response to price changes is what gives the supply curve its upward slope.
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I know. That's what I'm saying. They will respond to a leftward shift in the demand curve (loss of American demand from tariffs), by reducing output along their upward sloping supply curve, resulting in lower prices.
The only way to get prices to rise is with a shift in their supply curve and I'm not sure what the argument is for that.
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Right but the key is that the supply curve itself might shift too. Apple’s shift to India and Vietnam isn't frictionless new production costs, supply chain inefficiencies, and geopolitical risks can all raise marginal costs. That’s an upward supply shift, which can lead to higher prices globally, even with falling U.S. demand.
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I can see how that would happen hypothetically, but even with a leftward shift of the supply curve, the effect on price becomes indeterminant. Concluding that prices will rise seems like a stretch.
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