MJ Industries

Introduction: This article aims to shed light on the role of inferior goods during economic fluctuations, the differential impact of recessions on various industries, and the nuances of taxation that lead to diverse consumer prices. Inferior Goods and Recessions: In times of economic downturns, the demand for goods is significantly influenced by income elasticities. Inferior goods, characterized by a negative income elasticity coefficient, witness increased demand when consumers face lower incomes. Examples include instant ramen, canned food, and microwavable dishes. Understanding the behavior of inferior goods becomes crucial during recessions, as they become more appealing to consumers striving to manage their budgets effectively. Impact of Recessions on Industries: High-income elasticities pose challenges during economic contractions, with industries like automobiles, housing, and restaurant meals taking the hardest hits. The COVID-19 pandemic highlighted this vulnerability, leading...