Show HO HOW W PRICES DEFLATE TE V Consumer Resistance Does It Those same forces which recently knocked down prices of food and other commodities 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 demand demand de de- de mand and in some cases it has bumped into dem demand nd and money supplies on their way down according according according accord accord- ing to an analysis by the family amily economics bureau of Northwestern National Life Insurance company Poultry eggs potatoes oranges canned fruit juices certain canned fruits and vegetables preserves and jellies all have had little private recessions re reo cessions of their own during the past year By the end of 1947 the prices of most of these items either V had leveled ofT off ar If r were actually below the levels of a year previous the study says In manufactured goods the supply sup ply of small radios recently has overflowed the level of demand with prices skidding in many cities Large radios arc are very close to current current current cur cur- rent demand as are washing machines machines ma chines stoves and deepfreeze freeze units As long as consumers dem demand nd goods despite rising pr prices ces the study pointed o out t the manufacturer will pay higher and still higher costs for tor materials and labor rather than have his production shut down and his flow of goods to I the consumer cut ofT off Retail stores buy his finished products despite higher manufacturing costs because because be be- cause they know their customers want the goods I b But when enough consumers indicate indicate indi indi- cate they will vil not pay increased I I prices then manufacturers and stores stiffen stiffe their own resistance to higher pr prices ces of materials wage boosts an n the resulting price markups markups mark mark- ups for the finished goods because bec-ause it is evident that such further increases increases increases in in- creases will prevent the products from being sold When demand falls taIls of off and meets rising supply the result is a a halt in inthe inthe inthe the price rise and often a sharp downturn Sometimes consumers merchants and manufacturers all aU decide that prices are re going to keep on declining and therefore cut their buying st still sUll i more all along the line Downward price spirals usually start shIrt in that way the study ob ob- ob- ob served |