the economic recession has begun in the mid of 2008 but the

the economic recession has begun in the mid of 2008 but the price of the dishes of the catering industry does not seem to go down immediately. try to explain the

reason

Update:

please use english to response do not use chinese thank you

2 Answers

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  • 1 decade ago
    Favorite Answer

    In general economic sense that the economic recession will decrease the demand of dishes of the catering industry. However, the price of them will not be affected immediately.

    First of all, the purchasing power of the citizen still yet be affected at the early stage. People disposable income will have certain extend of effect, but they think it is a short term fluctuation that the daily activities will be affect much.

    Secondly, in the aspect of restaurant, i) the operation cost has not been lowered, such as the signed contract with the landlord; ii) there will be additional cost involved when they change the menu.

    Therefore, the price of the dishes will be change immediately. This is price rigidity.

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    1 decade ago

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