Companies don't factor costs of production into their pricing? Have you ever worked for a company in any capacity besides janitor?So you think companies just take the extra money and, what? Throw it in the president's office? Bury it in the backyard?
Or invest in more production. Or lower prices to gain market share. Or return the money to shareholders.
But that is a dodge.
If you lower the price of something, you sell more of it. Lower the price of labor and you will sell more of it, i.e. more employment. This is Econ 101, which many of you obviously failed.
Okay, corporations should sell all their goods for 1c. Just imagine how much they'll sell!
Corporations sell their products at the price that they feel balances consumer demand with maximum profits. They don't set their prices based on how much production costs. They set their prices based on how much they can charge without such reduction in demand offsetting the higher per item profit margin. If you don't understand that then obviously, you failed Econ 102.
Of course production cost is a factor. That sets a floor as companies will rarely sell product at a loss. But they have a range they can sell in and higher profitability vs volume/market share will drive where they sell within that range.