ESSAY 12

Advantages/disadvantages of consumer goods that have become cheaper

Business has always been for profit and that is the core of capitalism economic system. For this reason, profit in producing goods and distributing it to the consumer has always been the number one target of many companies. However, the recent trend has shown that there is a decline in the price of some consumer goods. I believe that price reduction for consumer products has its advantages and disadvantages even if it is commonly understood as a sign of positive thing.

The public, in general, does not always understand clearly about the negative effects that may happen if a price is set so low. When a product reaches the consumer, the product has a price that should cover the production cost and some profit margin. For a product to be able to reduce it price, there is a need for efficiency, and sometimes this might include laying off the unnecessary human resources, which have lost their place against modern production machinery. In other words, some people might lose their job for this price reduction to happen. For agricultural products, the same condition usually puts farmers at a disadvantage as they receive the lowest possible price for the harvest that they produce. These are two minor examples of what phenomenon might happen behind a price reduction.

In a capitalist system, those who are at the bottom of the pyramid are the one that actually put on physical work to make something. The middle-class economy is filled with people who work as civil servants or private sector employees. People who work hard and earn their salary without having to produce anything will absolutely rejoice should there be a price decline of consumer goods. By contrast, there is a small chance that the working class share the same sentiment as their work is rendered obsolete and that it would be much more difficult for them to get a new job after they are made redundant. When a country progresses toward a better economy, it would mean that the government is capable of increasing the public financial ability to buy things. Therefore, although the public always welcomes price reduction, it is necessary to ensure that such phenomenon happened as the result of the competitive economy instead of a massive effort in human resource efficiency.

To sum up, for an economy to be prosperous there is a need to constantly improve the national economic indicators and increase the human resource capability in general. Although it is clear now that price reduction is mostly perceived as a positive situation, we need to achieve this without sacrificing those who are at the bottom of the economy.

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