Inferior goods and recessions
While I would not call Smucker’s jellies and jams, Knott’s Berry Farms products inferior products, they do seem to be, according to economists definition of the term, “inferior goods.” Recall from class that “inferior goods are anything we tend to buy more of when our incomes go down. During recessions, incomes go down, because our production drops. (What a concept? Incomes have something to do with production.)
A few days ago I posted something on Spam and recessions. Hormel workers are now working overtime to provide American consumers the most mysterious of all mystery meat, Spam.Â
Now, the news offers more on the hot sales of an inferior good producer, a major maker of jellies and jams, Smuckers. It seems that when people’s incomes start to get hit they eat out less at high-end restaurants, and instead eat more at McDonald’s, eat more spam, and eat more PB&J, especially at home.Â
-MCÂ
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