Charlie Rogers, Manager, Bachelor of Management Studies (BMS), Lexington, Kentucky
Answered May 17, 2020
The current pandemic shows that any hit to the economy can greatly impact the price of goods. For example, disinfectant products and masks are in high demand right now, because people want to stay safe and prevent the virus from spreading. Due to this, the costs of these products have risen.
A bottle of Lysol spray used to be $3-4, but now people are seeing the number go up to $7-10 or even more if buying from a third party seller. Another reason why prices are rising is that people are out of work. Businesses are losing money due to the lockdown and having to raise their prices to ensure there is a profit being gained.
The change in the current economic status of the country will definitely affect the prices of the different goods that are being offered. For example, the country may have a harder time trading with other countries, which means that the number of imported and exported items will also be affected. If the demand for something continues to rise, but there is not enough supply, the prices of the items that are in demand will also become higher.
This is the same as the items that are not selling well. The items that are not selling well may need to be sold for lower prices so that they will be purchased. A change in the economy may also mean that people will not have jobs, which also means that they will not have enough money to spend.
The prices of goods will always be affected by the current state of the economy. When the economy is down, this means that people may not have enough money in order to sustain their needs. Yet, the demand for some items may also go up. Now that the coronavirus is happening, there is a demand for some of the items that are supposed to get rid of the disease.
For example, there are a lot of people who are hoarding alcohol and also toilet paper because they believe that this is something that they need. The fact that people would like to purchase these items more means that some people may sell their extra items for a much higher price.
The consumer goods sector includes a wide range of retail products purchased by consumers, which includes food, clothing, jewelry, and electronics. Specific foods consumers purchase can vary considerably under different economic conditions. The level of consumer spending on more optimal purchases which vary greatly depending on several economic variables.
The variables that most affect the demand for consumer goods are employment, wages, prices, interest rates, and consumer confidence. One of the two key factors influencing the market for consumer goods is the state of employment in the country. The more people that have a stable income, the more they will purchase.
Prices affected by the rate of inflation will influence spending consumer goods. Higher inflation rates erode purchasing power, which means that because of lower-income, the fewer people will spend money on frivolous items. Higher prices on consumer goods often eliminate the ability for the consumer to purchase.