Question

Write two paragraphs explaining if you are in agreement or disagreement with the statement "Low prices are good for the economy."

Answer 1

• Lower prices can sometimes be good and sometimes bad for some section's of the society. But in my opinion having constant lower prices are not so good for the ecomomy.
• Even though people usually prefer purchasing lower priced goods and services, they rate lower priced goods negatively. According to them low lower price goods have lower quality when compared to the higher priced goods. Due to which the brand images gets spoiled.
• Firms who set lower prices, over produce in order to compensate the cost of production and also to earn higher profits by attracting customers. While doing so they often neglect the negative externalities that they cause in their surroundings. These firms also face lower profits by selling goods at lower prices while competing with their competitors.
• People often tend to over consume when the prices are low in the Economy which can lead to negative externalities like pollution of water bodies, air, sound etc.