BIS Review 22/1997  -3-  Owing in part to this subdued behavior of unit costs, profits and rates of return on capital have risen to high levels.
As a consequence, businesses believe that, were they to raise prices to boost profits further, competitors with already ample profit margins would not follow suit; instead, they would use the occasion to capture a greater market share. This interplay is doubtless a significant factor in the evident loss of pricing power in American business.