[Bigun]

A business, ANY business, has exactly ONE source of revenue from which it must pay ALL it's expenses, from the light bill to the tax bill, and that source is it's sales receipts.

Anything which increases costs in a business can accrue to only three places or any combination thereof.

1. They can reduce the ROI of the owners of the business.

2. They can reduce the wages and benefits of the workers who actually produce the good or service. or

3 They wind up in the price(s) of those goods and services.

Where is the most likely place for them to go?

[expat_panama]

Anything which increases costs in a business can accrue to only three places ...

Sure, increased costs can result in lower profits, lower wages, and higher prices, but it does not have to stop there. 

Producers pay for more than just wages.  There's rents, raw materials, inefficiency losses, etc.  Maybe inefficient business can go belly up leaving the efficient ones to make bigger profits when shortages drive up prices.  Sometimes costs can be cut by dropping quality control, extending delivery times, discounts, or by dropping add-ons such as customer service.   Rents can be lowered by negotiating discounts ("it's 90% or nothing").  Same with financing costs the banks charge.

I'm telling you, there's lots of ways cost hikes get handled and no two are alike.   It doesn't matter much what you and I think is likely, or even what we think makes sense.   I have to care about what is-- even when we think it's unlikely or we think it's crazy.