Quote from: deisik on November 07, 2013, 10:49:02 AM

Quote from: ilpirata79 on November 07, 2013, 10:34:58 AM

I talked about what he/she adds for his/her work ("transformation of raw material/components"). The final price can be less because he/she bougth such material/components at a lower price.

Deflation means that today's prices (your material/components) are higher than tomorrow's (ready product which producer sells). The producer gets into situation when he buys dear but sells cheap, so his profit margin narrows. When it reaches the break-even point he stops production and fires his staff thus contributing to ever falling demand (the cause of prices fall)

My statements are compatible with deflation.

I sell something today at price A, because I had to buy material/components which costed x,y and z and I added my profit (or added value) Q. Therefore A=x+y+z+Q

In a month I sell something at, say, A'=A-15/100*A. I had to buy material which costed, FIFTEEN days before I selle, x'=x-20/100*x , y'=y-20/100*y, z'=z-20/100*z, and I added value Q'=Q+somePercentage/100*Q, so that A'= x'+y'+z' + Q'.

In fact, I sell at a lower prince (which can be defined as defaltion), but I still earn MORE.

I think deflation will make us all richer, apart from politicians and their lacché that will lose a lot of their privileges.

Best regards,
ilpirata79