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Hello sir
I’m confused here.
Which of the following organization is most likely to benefit from a period of high price inflation?
A- an organization which has a large number of payable.
B- a supplier of goods in a market where consumer are highly price sensitive and substitute imported good are available.I choose B but the answer is A. Sir shouldn’t A pay more money to suppliers as the prince increase and B sell more expensive?
A is correct because they will still be paying the suppliers the old (lower) price but be able to sell at a higher price.
B is not correct because as they put their prices up, customers are likely to stop buying (and by cheaper imports instead).
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