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Do prices of basic things ever go down when the economy is good

Ren Riddick

Village Elder
#1
Why is it like it's always prices of basic things going up when the economy is bad but they never come down.

Leave alone stuff like PlayStation, iPhone where the price goes down because the product is out of fashion.

I'd expect a shopkeeper tell one, 'hey the economy is bad and that's why the new price of the product (e.g loaf of bread) has increased by 10 shillings.'

Of course the economy won't be bad forever, it will come back to stable sometime in the future. And when it comes back, the price of the product won't lower to where it was before things went to bad.

It will remain the same!!
 

TuTu

Village Elder
#5
And when it comes back, the price of the product won't lower to where it was before things went to bad.
When the economy stabilizes, it means people will have more money in their pockets which will spur demand for goods so actually (in the short run) prices will rise. The increased demand will trigger producers to produce more and with increased supply the prices will start coming down (in the long run) until demand and supply find an equilibrium upon which prices will stabilize.
 

majizee

Village Elder
#6
The price of bread may not come down but your income improves when the economy improves and so you can afford more or bigger bread and once in a while cake
 
#7
New models of Apple iphones (&other makes) need to be sold. This can only be done by ensuring the older models are off the the shelves, through sales (reduced prices) otherwise they will impact on new model sales.
For basic goods, there,s inflation. Both Zero and extreme inflation are bad for the economy.
Thus prices will rarely come down.
 

majizee

Village Elder
#9
Just curious: can somebody tell me what the cheapest food is in Kenya currently seeing that maize/ugali is expensive nowadays
 
#10
It is very easy. when the economy is doing bad, the cost of production of essential goods go up eg fuel, electricity etc. Therefore it takes more to just produce the same loaf of bread or Unga. Also understand that most countries import fuel. In Kenya's example, we import fuel using dollar meaning we need more shillings to just buy a dollar for the import. This cost is passed to the buyer since the producer wants to break even and recoup his losses. The government on the other hand increases taxes since it is broke the economy is doing bad. So you find the taxes are passed to the mwananchi.

When the economy gets better, it has been rebased, by the inflation meaning that the last price which is high becames the normal. Mainly because it is figured out that the economy is doing better so is everyone. You remember the CBK governor saying in 2019 that Kenya was growing but people had no money? That is what is assumed.

Kenya is in deep shit my friends. The government is increasing tax in everything while debts repayment has approached. We elected Uhuru and Ruto and they have messed the economy so badly that the only way out is to borrow more, default our loans or ask IMF for bail out
 

Tom Bayeye

Village Chief
#11
I'd expect a shopkeeper tell one, 'hey the economy is bad and that's why the new price of the product (e.g loaf of bread) has increased by 10 shillings.'
These are the worst parasite of them all. When commodities price go down watakuambia "ni stocko ya jana na siezi uza na bei ya leo" .....fair enough,but when the price goes high,yesterday's commodities will be sold at today's high price
 

majizee

Village Elder
#12
These are the worst parasite of them all. When commodities price go down watakuambia "ni stocko ya jana na siezi uza na bei ya leo" .....fair enough,but when the price goes high,yesterday's commodities will be sold at today's high price
Don't complain. When it starts raining in Nairobi CBD matatus double fares immediately
 

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