Wrong! As a retail business owner I would welcome the wider margin and use it to pay down some debt or maybe even afford some other necessities. Lower prices would be the last thing I would do.
So you have no competition?
Say you're in the dry cleaning business, and you have three local competitors. You and two other cleaners decide to "welcome the wider margin and use it to pay down some debt." One of your competitors decides to use it to lower prices on cleaning men's suits (the driving product of dry cleaning sales, btw) to increase his sales volume.
How long do you think it will be before you and the two others that didn't lower prices will lose enough customers that you'll be forced to lower your prices to meet your competitor's?
Businesses don't operate n a vacuum. Competition works every time to lower prices.
Lower prices would be the last thing I would do.
Going out of business would be the last thing you would do. You may not want to lower prices, but if your competition is eating away at your customer base, because they have lowered their prices, you will be forced to lower prices or go under.
And when your competition lowered prices, not lowering prices would be the last thing your business would do.
Competition works. If you could have that large a margin in your revenue stream, you would have already raised your prices that high.
“Wrong! As a retail business owner I would welcome the wider margin and use it to pay down some debt or maybe even afford some other necessities. Lower prices would be the last thing I would do.”
OK. Keep your prices the same. I’ll buy from your competitor
Who will go out of business first? You or your competitor?
“Lower prices would be the last thing I would do.”
But they would be the first thing someone else would do. Or did you somehow forget that you’re not the only “retail business owner”? Prices would be competed down, duh.