Question

Over a bussiness cycle, why do the prices and output of durable-goods industries behave differently from those of nondurable-goods industries (Macroeconomics)

Answer 1

ANSWER:

IN ORDER TO UNDERSTAND WE NEED TO KNOW WHAT ARE DURABLE GOODS AND WHAT ARE NON DURABLE GOODS AND IF WE LOOK AT DURABLE GOODS , THEY ARE THE GOODS WHICH ARE NOT EXHAUSTED OVER A LONG PERIOD OF TIME LIKE BOOKS , ELECTRONIC ITEMS , TOOLS AND FURNITURES AND IF WE LOOK AT NON DURABLE GOODS THET ARE THE GOODS WHICH ARE QUICKLY EXHAUSTED WITHIN A SHORT SPAN OF TIME LIKE FOOD , MEDICATION , PLASTIC , RUBBER.

SO WHEN A GOOD LASTS LONG, LIKE DURABLE GOODS ARE AND DURING A BUSINESS CYCLE WHEN THERE ARE PERIODS OF RECESSION , THE PRODUCTION CAN BE POSTPONED AND THEREFORE THE OUTPUT PRODUCED GOES DOWN AND SUBSEQUENTLY PRICES ARE AFFECTED WHILE NON DURABLE GOODS CAN'T BE POSTPONED AND THEREFORE THERE SUPPLY IS CONSTANTLY AVAILABLE AND THERE IS HARDLY ANY FLUCTUATION IN PRICE DESPITE IN DIFFICULT BUSINESS CYCLES LIKE RECESSION AND THE NON DURABLE GOODS OUTPUT AND PRICE MORE OR LESS REMAINS CONSTANT THROUGHOUT THE BUSINESS CYCLES.