Prices

Bringing down inflation does not mean prices are coming down. It means they are rising at a slower rate. The way to bring prices down is to reduce the cost of production. The prices of some products move fast while others are slow to move. In economics, price sensitivity is described in terms of elasticity of demand. The price of gasoline is inelastic because people must buy it even if the price goes up. The price of chocolate is elastic because as the price goes up people buy less of it. The rules of supply and demand apply best to elastic demand. The biggest cause of gas prices is oil prices. When the raw materials needed to produce a product become less expensive the finished price goes down in price and this includes the cost of transportation. The obvious step to lower prices is to expand fossil fuel production to the max. This means lower gasoline prices, lower home heating prices and lower electric bills. It also means lower food cost, lower travel cost and host of other areas. Governments can help by reducing spending which fights inflation and lowering interest rates. This helps people with credit card debt and with new purchases like cars and homes.