Why is an economic depression bad for consumers even though prices are cheaper?
In: 88
Supply and demand.
Supply = how many of the same stuff is around for sale.
Demand = how many people want to buy that stuff.
Low supply + high demand = high prices
High supply + low demand = low prices
What happens in an economic depression? There are less jobs (high unemployment), in short, there’s less money in general.
This means: high supply, but less demand. There’s a lot of stuff, but less people buying.
Lowering prices is pretty much a way for companies to cut their losses.
If a company is operating at a loss, they are most likely not hiring people, they might be even cutting positions and in turn contributing to more unemployment.
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