Consumer price rollbacks?

As we look at the Consumer Price Index, which is an indication of the prices for a “typical” grocery basket of a consumer. The Consumer Price Index is currently falling due to the economic crisis. Many economists consider this as a negative because it can affect the stock market and investment. However, there can be another approach to the reduction in prices. Currently, retailers utilize a 100- 500% markup on goods and services. What this equates to is that a retailer can purchase a blouse for $2.50 wholesale and will sell the same blouse to the consumer for $29.99. That is a profit of $27.50. As the economic crisis continues, retailers are complaining that sales are down. Yet, with the markup on the goods and services retailers should not be indicating that they are not profitable. We have to think of the fact that the same good or service was significantly lower in the 20th century. Consumer prices increased as the income for the Middle Class increased. The prices were based on the ability of the Middle Class to purchase the good or service and the affordability of the lower class was not considered. Well, we are back to the fact that the Middle Class is shrinking and therefore the prices that were considered affordability before are not applicable now. In addition, many manufacturers and retailers indicated that the reason for increased prices was due to the changes in the production process due to the increased use of technology and the costs had to be passed on to the consumer. With this in mind, it is only appropriate that when the cost for the technology reaches the “break even point” the cost should be lowered so that the consumer is not continually charged for the use of technology. This has not been the case. As the economic crisis continues, retailers may need to consider lowering prices so that the average consumer can afford the goods and services.