This line of thinking is wrong, here’s why:
Corporations attempt to maximize profit, meaning they charge the MOST they can get for a product. To maintain a specified margin when the costs to make that product increase you assume the price of the product would go up, but if they could still sell that product at that higher price, why would they not have done it originally, since they are bound to maximize profit?
You're conflating the term "maximize profit" with "maximize price". They are very different.
Corporations are very aware of the volume changes which result from price changes. If a price increase reduces sales sufficiently, profits will be reduced rather than increased.
Corporations have competitors who face the same cost issues as they do. If XYZ Corp. and ABC Corp. are selling the same products, their costs will rise simultaneously and they can both then increase their prices. If one of them raises its prices arbitrarily, they'll lose business (hence profits) to the other.
“Corporations attempt to maximize profit, meaning they charge the MOST they can get for a product. To maintain a specified margin when the costs to make that product increase you assume the price of the product would go up, but if they could still sell that product at that higher price, why would they not have done it originally, since they are bound to maximize profit? “
I can tell you’ve never sold anything before..
I sell product A, so does 20 other Companies. I sell it for the most I can get, which is moderated by what the other 20 will sell it for. Now along comes uncle sam and he puts a 10% tax on product A. I will raise the price of my product A by 10% as will all the other providers. The price has already been controlled by market forces. The 10% tax is simply a new tax on everyone that purchases product A.
Corporations don’t pay taxes, their customers do...
Correct.
meaning they charge the MOST they can get for a product.
Not always. There are various pricing strategies and the above is only one strategy. See Wall Mart for instance whose profit strategy is based on high volume sales driven by low price.
The line of reasoning isn’t wrong, just incomplete imo - but mostly right.
A retailer has to pay all costs. One of the sources of revenue with which costs may be paid is sales revenue [prices] - indeed sales revenue is the only indefinite revenue stream for a retailer.
However if one particular retailer [in a competitive environment] is unable to recover increased costs via sales revenue, it only means that the costs must be recovered from somewhere else.
In the end, it is always an individual who pays for [increased] costs incurred by a retailer - always.
It is usually an individual consumer via higher prices. But if the retailer is put at a competitive price disadvantage for some reason [as in this case] then the increase will have to be made up by an individual elsewhere;
it will be paid by an individual worker in the form of lower wages or
it will be paid by an individual investor in the form of lower ROI.
Those [or a combination defined by market circumstances] are the only three possibilities. It sounds like CVS determined that neither wages or ROI can suffer. Hence, no increase in cost will be permitted.
I think my reasoning is perfectly fine as it is but thanks for your concern. :-)