r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 9h ago

Meme needing explanation Petah?

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u/Terpcheeserosin 8h ago

Why does things costing less make people buy less?

If wages stay the same, shouldnt people just buy the dip?

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u/Poland-lithuania1 8h ago

It isn't things cost less, it's money can buy more. Isn't it better to save that money for the future, when it's probably gonna be able to buy more?

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u/Terpcheeserosin 8h ago

So things don't cost less

But money can buy more?

So right now eggs are 10$ a pack

After deflation

You can buy 2 for 10 dollars because "money can buy more"

How is that not also, "eggs cost less" ?

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u/Royal_Mewtwo 7h ago

The person you’re replying to put it poorly, but I think I see what they’re trying to say.

An egg costs X-amount of actual materials and labor to produce (maybe a certain number of pounds of feed, a certain amount of land, and a given number of labor hours). That X-amount doesn’t really change (the “cost”).

Separately, a dollar is worth Y-amount of that cost. If you think the value of Y is increasing (deflation), why spend it now instead of wait until Y can buy even more X?

In inflation, it’s the opposite: invest Y money NOW, because it gets the most X you’re ever going to get moving forward. Inflation incentivizes investment.