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Firms Might Not Raise Prices When Doing So Might Increase Profits Because

es when doing so would seem to increase_ profits? Firms might not raise prices when doing so might increase profits because
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consumers find it unfair for firms to increase prices after an increase in demand. --- Economists have provided two explanations for why firms sometimes do not raise prices when doing so would seem to increase profits. _First, economist Gary Becker has examined products that buyers consume together with other buyers and suggests that for those products the amount consumers wish to buy may be related to how much of the product other people are consuming. In this_ case, a firm that increases its prices enough to eliminate excess demand might find that it has also eliminated its popularity. _Second, economists_ Kahneman, Knetsch, and Thaler have found that most people consider it fair for firms to raise their prices following an increase in costs but unfair to raise prices following an increase in demand. These explanations share the same_ idea: Sometimes firms will give up some profits in the short run to keep their customers happy and increase their profits in the long run.
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