"So? Did you agree?" Stille asked Xu Yi curiously.
"Of course not." Xu Yi shook his head. "After all that talk, what he really wanted was for our Xinfei Merchant Guild to take the lead in cutting prices. Then the other merchant guilds in Bunta City would have no choice but to follow. That way, the Walmart Merchant Guild could buy its stock more cheaply, and its costs would be much lower than they are now."
"But if they can buy their stock more cheaply, they can lower their prices in the stores too," Stille said. "I think President Lundes was right. If prices go down, sales will definitely increase. Taken together, their overall profits might even rise."
Xu Yi looked at Stille, shook his head, and sighed softly.
Stille knew far too little about business to realize how wishful that thinking was.
Leaving aside whether the Walmart Merchant Guild would actually lower its retail prices after its purchasing costs fell, Xu Yi considered price cuts themselves a dangerous business.
As a saying that had once been popular in Earth's stock market, and later even more popular in its housing market, went: people bought when prices were rising, not when they were falling.
If prices were cut rashly, people's first thought would probably not be to hurry and buy while things were cheaper. Instead, they would think that since the price had fallen once, it would surely fall a second time, then a third... and become less eager to buy.
Besides, once price cuts began, they were very difficult to stop.
If the Xinfei Merchant Guild lowered its prices, the other merchant guilds producing magic machinery in Bunta City would have to follow, even without Xu Yi saying anything.
And once the Xinfei Merchant Guild set that precedent, other merchant