Business: Holding the Price Line

"A lot of manufacturers would rather go out of business than cut prices." So said an Atlanta department store manager last week, and his words echoed throughout the U.S. business community. Contrary to all the old economic laws, prices have held remarkably steady in the face of the recession; in some cases, they have actually risen.

Instead of cutting prices, many a manufacturer is pushing cheaper lines or stripped-down models to give customers the impression of lower prices. One reason for the lack of price cuts is that manufacturers' labor costs have continued to rise while productivity has lagged behind. Another reason...

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