Problem is that every business is constantly losing money on inventory. They buy it at $100 and sell it for $95. Eventually this creates a supply shortage, with a huge demand.
I paid 2.65 with my kroger 10 cents off.. let it drop,,,
In theory, lower prices should attract more customers and create more gross profit.
Because people buy more when prices are low.
You don’t understand they will make it up on volume
Walmart, Target and a slew of discount stores have margins that are so large they are able to run half price sales and still make money.
I was in Taiwan 25 years ago and was taken to lunch and a tour of a phone factory. The phones were manufactured on an assembly line for 60 cents and sold in Kmart for $9.
That is one-eyed economics. They sell the 100 dollar item for 95 that is worth what the 100 was and the next thing they buy is also less. A modest steady deflation is much netter and less disruptive than inflation at any level. There was steady modest deflation all through the 90s and the result was people didn’t have rising incomes in dollar measurement but were not feeling pinched because their/OUR money bought a little more each year. In periods like that there are not the big industrial strikes that characterize inflationary periods.