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Why do things cost what they cost?
Many articles are getting more expensive, but some may become cheaper too. Why is that so?
How much does a scoop of ice cream cost?
Let’s look at this example: Everybody likes ice cream. And we are willing to pay for the treat. But how much?

How much are you prepared to pay?

Most people do not want to pay more than 1.60 euro for a scoop of ice cream. Some people are prepared to pay more than two euros for a scoop of very good ice cream. But hardly anyone would be willing to pay more than ten euros.

At what price ist he seller prepared to sell?

Ice cream vendors want to earn an income, of course. They have already spent some money: for an ice-cream cart, an ice-cream machine, ingredients, cones, etc. And they have to be able to live on the earnings from their business. When calculating the price of a scoop of ice cream, the vendors have to take into account all their costs and the profit they want to make. Of course they would be delighted if they could ask ten euros per scoop. But at this asking price, they wouldn’t find any customers. So they are usually prepared to sell their ice cream at 1.60 euro per scoop if that is enough to cover their expenses.  
When people want to buy more ice cream (demand) than is on sale in the market (supply), the price rises to the point where it is too expensive for enough prospective buyers. But if there is more ice cream (supply) than people want to eat (demand), the price must go down until enough people are interested in buying ice cream. Prices can be higher if there are only very few places that sell ice cream in a given area. You may have noticed this already: At a seaside kiosk ice cream usually costs a lot more than in a supermarket. Because many people fancy an ice cream when they are at the seaside, but there is usually only one kiosk, the seller can ask higher prices – and people will pay them.
What is true of ice cream also applies to other products and services. So prices rise whenever the supply of goods diminishes. This is true across all sectors of the economy: when night frosts hit the apricot orchards in the Wachau region in May, the harvest may be very poor. And if there are fewer apricots to buy, their price goes up.
Who sets prices?

What Dr. Dr. Money says

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Who sets prices?

Why do things cost what they cost? Many articles are getting more expensive, but some may become cheaper too. Why is that so?

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