– What would it take for prices of things like food to decrease back to something affordable?

Question

For context – I just saw a post that said for the first time since 2020 McDonald’s hasn’t made as much money or something, and their prices have increased 40% since 2019. – if big companies start losing profit because people chose to not spend their money there because they can’t afford it, Would prices ever go back down?

In: Economics

Answer 1

What counts as affordable? People are buying food at the current prices presumably, so it’s affordable enough to not lead companies to lower their prices. Also FWIW, wages have grown faster than inflation (though perhaps at least restaurant prices have outpaced wages).