Show 17 HOW U PR PRICES ICES DEFLATE consumer C stu amer resistance does I 1 st those same forces which recently knocked down prices of food and other commod ties in a spectacular outburst have been quietly at work all during the past year rising supply in a number of lines of goods has caught up with de mand and in some cases it has bumped into demand and money supplies on their way down accord ing to an analysis by the family economics bureau of northwestern national afe L fe insurance company poultry eggs potatoes oranges canned fruit juices certain canned fruits and vegetables preserves and jellies all have had little private re cess ons of the r own during the past year by the end of 1947 the prices of most of these items either had leveled aff or were actually below the levels of a year previous the study says in manufactured goods the sup ply ot of small radios recently has overflowed the level of demand with prices skidding in many cities large radios are very close to cur rent demand as are washing ma chines stoves and deep freeze units As long as consumers demand goods despite rising prices the study pointed out the manufacturer will pay higher and still higher costs for materials and labor rather than have his production shut down and his flow of goods to the consumer cut off retail stores buy his finished products desp te higher manufacturing costs be cause they know their customers want the goods but when enough consumers adl cate they will not pay increased prices then manufacturers and stores stiffen their own resistance to higher prices of materials wage boosts and the resulting price mark ups for the finished goods because it is evident that such further in creases will prevent the products from being sold when demand falls off and meets rising supply the result Is a halt in the price rise and often a sharp downturn sometimes consumers merchants and manufacturers all decide that prices are going to keep on declining and therefore cut their buying still more all along the line downward price spirals usually start in that way the study ob served |