Photo: The Star
1. First of all, the price of a chicken isn’t going to decrease at all. In fact, . The Star Newspaper reported that May inflation rate is up to 1.7% compared to last year. This is a bad news for dad, especially a young dad like me, who struggles with limited money against his kids expense, loans, utilities, and all. Another percent of inflation is another headache to bear. The good news is, the inflation rate over the last five years is in consistent move but we don’t how long it will last.
We should be worried because average salary increase has shown the downward trend from 94 – 2007. There’s no way we can beat the economy with the salary. What we can do is, we can beat them with our expenses and demands. When both of them — especially our demands — are decreasing in the market. The market will go down its price.
2. Understand the basic micro economy. Micro economy is a study of how to we manage our unlimited want with limited resources. Also, micro economy studies demands and supplies curves in a market. You see, if there’s a demand in a market, there will be a supply. If the demand is increasing, the line will be shifting, forcing the price to go upward along the line of supply. There’s a video to make you understand.
Same as if happened the demand becomes decreasing, the price will follow downward, produce the surplus in the market. Let’s take an example of selling price of chicken. Hypothetically, 1 kilogram of a chicken is RM6.50. If no one demand a chicken in a certain period of time, the seller will surely lower the price as they afraid their chickens will be rotted. Surplus.