Economists say that Economy Minister Rafizi Ramli’s view that hotels should lower their prices in line with falling commodity prices is wrong.
Nazari Ismail. Nazari Ismail of the University of Malaya, who described Rafizi’s comments as “difficult to understand”, said the country’s market structure meant that restaurants that charged unreasonable prices would lose customers and investors. money.
He said that apart from equipment, other factors such as location, salary and travel expenses also come into play when determining the cost. “Therefore, despite the reduction in the price of some food items, restaurant owners may still choose to maintain their menu prices to make sure their money is safe,” he said. Meanwhile, Center for Market Education CEO Carmelo Ferlito suggested that Rafizi may leave. of touching the concept of economy and modern conditions.
He said Rafizi “hasn’t understood” that production cost alone does not determine sales. “This approach has been abandoned in economics since the 1870s,” Ferlito said.
“Prices are determined by supply and demand, not because the cost of production is high. “The high demand is due to factors such as the holiday season, increased spending due to demand in the past few years (during the Covid-19 pandemic) and rising labor costs. high, which is unsustainable because it is caused by the financial expansion policy. He added that the amount of money distributed due to long-term interest and various aid programs since the beginning of the epidemic also played a major role in creating great demand.
Speaking to reporters in Kuala Terengganu on Friday, Rafizi said that while the prices of various items have dropped, the prices of food in some restaurants and shops have continued to rise. He advised consumers to avoid grocery stores that charge unreasonable prices.
Another economist said that the true intent of Rafizi’s statement may be lost in the way it is interpreted. The cost of raw materials will not necessarily equate to a reduction in food costs. Barjoyai said the government should work to instill “reasonable consumers” who are price conscious, aware of their various options in the market, and aware of concepts such as supply and demand.
He added that in the long run, the government should also remind businessmen of their role in society and the importance of serving the greater good – not just thinking about profit. “Profit will come naturally in the end. Greedy sellers only care about short-term profits,” he said. “In the long run, they won’t survive.”