– 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

Prices don’t tend to go back down. It’s actually a bad sign if they do. Instead, wages slowly move upward to match the increased prices. This adjustment just takes time.