3 ms·
I guess it would depend on the cause for the price drops since there could be many reasons for them. If it were because of an increase of efficiency then it wou
by zamadatix 3y ago
I guess it would depend on the cause for the price drops since there could be many reasons for them. If it were because of an increase of efficiency then it would be a good thing, more things being made for less increasing supply causing them to be cheaper at a given demand is a good form of growth. The article mentions the drops are coming from a decrease in demand though, not an increase in supply. This kind of thing could conceivably lead to a spiral of lower demand -> cheaper prices -> less production -> less money flow -> lower demand -> ... under certain conditions.
I'm no economics major though, so more educated interpretations of why it could be bad are appreciated.