<p>Profits also depend on the quantity demanded/sold. If deflation is accompanied by a decrease in demand, under equal input/output price deflation (or even if input prices fall more than output prices), profits can fall.</p>

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2018-10-27T21:03:22.083Z
2018-10-27T21:03:22.083Z
RA334
<p>Profits are the difference between input and output prices. Is there any reason deflation would cause profits to decline generally rather than in those industries where output prices fell faster?</p>

<macroeconomics>
Is there any reason deflation would reduce profit?
user19978
# Is there any reason deflation would reduce profit?

(Asked by: username_0 on 2018-10-27)

Profits are the difference between input and output prices. Is there any reason deflation would cause profits to decline generally rather than in those industries where output prices fell faster?

**Tags:** macroeconomics

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## 1 answers

### Answer by username_1 on 2018-10-27. Score: 1

Profits also depend on the quantity demanded/sold. If deflation is accompanied by a decrease in demand, under equal input/output price deflation (or even if input prices fall more than output prices), profits can fall.


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