https://x.com/NathanJRobinson/status/1800915894585147399
Krugman, despite being a neoliberal knows that food is an essential item. So likely he is propagandizing for Biden.
Look at personal savings rate.
this post was submitted on 12 Jun 2024
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Perhaps the most egregious part of this is that the graph shows dollar expenditures, not meals bought.
It's common for companies to raise prices to increase revenue, even if raising prices results in fewer people buying your product. This shit is taught in high school economics. Absolutely nothing here shows anything about how many people can afford fast food.
I thought so too, but look at the y axis. These are inflation adjusted, to 2017 dollars
as people in the replies to Stancil (linked by Parsani below) mention, the CPI adjustment is based on overall inflation, not inflation of restaurant prices specifically, so it's still flawed IMO since I believe restaurant (especially fast food) price inflation significantly outpaces overall inflation.
Even adjusting for inflation, it's common to raise prices to increase revenue (consumer expenditures). There are business people all over the world right now drawing up graphs of how much total revenue they can generate at different price points, and low price/mass sales is not a good approach for many companies.
This is an important point, because prices are set largely by what people are willing to pay, not costs + whatever margin a company picks, for example. Tons of right-wing media pretends industry does rudimentary cost + margin pricing to push talking points like "if our business has to pay one cent more in taxes or wages that will ultimately be paid by consumers," which is preposterous theoretically and has been disproven by real data over and over.
Basically: sale price is determined by what company thinks maximizes overall profit, cost of product (including shrink) determines whether the product is carried at all. It's something I bring up in the shoplifting debate a lot, as people assume it increases price of individual items. Of course shrink plays a role when businesses make decisions, but why would a business charge you less than you're willing to pay for an item?