Inflation has negatively impacted many businesses by reducing consumer buying power and earnings. As inflation rises faster than incomes, consumers have less ability to purchase goods, leaving some businesses with excess inventory and higher debts. To adapt, businesses must adjust to current consumer spending levels and prices, which can reduce profits. A study in Masinloc, Philippines found that inflation in 2022-2023 increased costs for small businesses like food bars and dress rentals, without a corresponding increase in profits. Inflation makes affording goods a challenge for both consumers and businesses in the local area.
Inflation has negatively impacted many businesses by reducing consumer buying power and earnings. As inflation rises faster than incomes, consumers have less ability to purchase goods, leaving some businesses with excess inventory and higher debts. To adapt, businesses must adjust to current consumer spending levels and prices, which can reduce profits. A study in Masinloc, Philippines found that inflation in 2022-2023 increased costs for small businesses like food bars and dress rentals, without a corresponding increase in profits. Inflation makes affording goods a challenge for both consumers and businesses in the local area.
Inflation has negatively impacted many businesses by reducing consumer buying power and earnings. As inflation rises faster than incomes, consumers have less ability to purchase goods, leaving some businesses with excess inventory and higher debts. To adapt, businesses must adjust to current consumer spending levels and prices, which can reduce profits. A study in Masinloc, Philippines found that inflation in 2022-2023 increased costs for small businesses like food bars and dress rentals, without a corresponding increase in profits. Inflation makes affording goods a challenge for both consumers and businesses in the local area.
The impact of inflation among business owners and how it
affects the earning power of consumers. Monetary Theory of Inflation The monetary theory of inflation asserts that money supply growth is the cause of inflation. Faster money supply growth causes faster inflation. In particular, 1% faster money supply growth causes 1% more inflation. With other things constant, the price level is proportional to the money supply. Doubling the money supply would double prices. Impacting a whole lot of business, inflation has made some business, dull or shunned by consumers as they have lower buying power. and since inflation has risen and the earning power of the consumer has not. For that reason, some businesses are left nothing with an inventory full of unsold items from previous orders and higher debts for rent payers. Inflation has made all kinds of business to adjust and adapt in current consumers power and deal with lower profit due to adapting. Since we are conducting research about inflation here in Masinloc, Philippines we are considering the culture of customers here in Masinloc we are aware of how much our mothers, the ones who shop and buys the needs of the household, we are going to say that they’re very meticulous on the prices on what they buy. They do always say money don’t grow on trees but paper does. But the better saying is money don’t just increase, the bank is in control. Inflation has caused more and more dilemma to the people of Masinloc making a business and earning a living. This has further worsened as inflation rosed and income still in a stagnant state. Affording things these days can be a hassle, and the inflation does not help one bit. Many of the business we have questioned said that the impact of inflation in the year of 2022 to the year of 2023 have increased but profits have not increased or become much better and it reflects on how the inflation can affect businesses, specially small businesses, such as food bars and dress rentals.