Why Some Price Hikes Stick

If you’ve ever wondered why some price increases hurt your business while others seem to stick,

this is why. We all push back against inflation. But we also keep buying certain products

even when prices go up. Take the iPhone. Prices keep rising, yet demand barely

changes. Compare that to products like Peloton, where prices went up and demand fell

quickly because customers had plenty of alternatives. The difference comes down to price elasticity.

That is how willing customers are to walk away when prices rise. When demand is less

sensitive to price, people keep buying even as prices increase. This usually happens when substitutes

are limited or switching costs are high. This matters because pricing power determines who absorbs inflation