Why do prices go up?

Many daily necessities are rising in price. The price increase is caused by many factors, some of which are interrelated. In the face of rising prices, we should properly adjust our consumption habits and improve our financial management ability, so as to better cope with rising prices. The following are some possible reasons for the price increase:

1. Relationship between supply and demand: If the demand for an item increases without a corresponding increase in supply, the price will rise. On the contrary, if supply increases without a corresponding increase in demand, prices will fall.

2. Weather and natural disasters: Natural disasters such as floods, droughts and fires may reduce the supply of agricultural products or resources, thus leading to price increases.

3. Currency devaluation: If the money supply increases without a corresponding increase in economic activities, it will lead to currency devaluation. This will lead to an increase in the price of imported goods, which in turn will affect the overall price level.

4. Production cost: If the production cost of a commodity increases, such as energy cost, labor cost, raw material cost, etc. Then manufacturers may need to raise prices to keep profits.

5. Policy changes: Changes in government policies may also lead to price increases. For example, if the government imposes a higher tariff or value-added tax on a commodity, the manufacturer may have to raise the price to offset these extra costs.