Desmond Elliott » economy economics retail deflation http://www.desmondelliott.co.uk Tue, 19 Jul 2011 15:47:45 +0000 en hourly 1 http://wordpress.org/?v=3.2 Retail prices http://www.desmondelliott.co.uk/2008/12/24/retail-prices/ http://www.desmondelliott.co.uk/2008/12/24/retail-prices/#comments Wed, 24 Dec 2008 12:12:28 +0000 Desmond Elliott http://www.desmondelliott.co.uk/?p=86 If economics tells us that a healthy market should have more than one supplier of a product to allow for competitive prices, what happens when the competing suppliers go bust trying to weather a recession?

If consumers are not spending money, suppliers will presumably attempt to entice them to spend by lowering their prices.

Thinking about the lowering of prices as an act of determining the price the market is now willing to bear for their products, should this result in a short-term deflation of retail prices? Or does this act as a longer-term expectation from consumers considering how to spend their discretionary income?

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