. Take for instance, there is a surge demand for food, such as ham, chicken ,beef , lamb etc...That would mean there is a shortage of the food, hence there would be an increase of price to meet a new equilibrium point.
But ultimately, it is the the super market who will be getting the most profit. The producers of the products are the price takers, thats because there are many of them who are willing to take the job. However, the supermarket will be reaping the benefits, they monopolize the necessity consumer industry after all. And don't go about, that workers will be getting extra pay. There pay is according to a work contract, and even so, it is only miniscule, 5% or 3% increase per year.
You add that to the inflation of eletricity, water, petrol etc....That makes your 5% or 3% increase wage per year, almost nothing. To the consumers point of view, this is undesirable.
10 percent then producers will simply be getting 10 percent more for their product, consumers will be paying 10 percent more for their products. So... where does it all go wrong?
Flawed Idea, we live in a capitalist market. We want to be the richest. We are selfish, ambitious and want to make the most money. So we'll do at all cost to maximize our profits. Therefore, producers, most times, won't be getting a 10 percent more for their product.
Example: How much does to take to make an ipod? How much does an ipod sell for?