Business Environment, 4th Edition by Pearson

Inflation | 271

during the period of inflation, and those profits continue to increase as long

as the prices raise. However, the producers of conventionally priced goods

and services, such as electricity and transport services, gain very little or not at

all during inflation, because the prices of their goods are fixed by convention

or by law. When the prices in general raise, the cost of production of these

commodities or services also raises but their price remains constant, giving the

producer a continuously decreasing margin of profit.

 Fixed Income Groups: Inflation hits wage earners and salaried people very

hard. Although wage earners, ...