I'm 15 so i don't know much about how the economy works. On the news they always say how prices go up ?

Question

and how ppl buy less. Isn't that kinda obvious..wouldn't it make more sense to lower the cost of things. that way ppl would buy more

Answer 1

The reason why things cost more is because the raw materials required to make those things... have also increased in price. For the business to survive, they have to pass on the additional costs to the consumers like you and me.

And because our wages do not go up fast enough to catch up with the price increases of everything else, thats why we can only buy less.

The  businesses cannot lower their prices because if they do, then would not make enough money to survive. And if they stop business, then people will have no jobs.

Answer 2

People only have x-amount of money to spend. If companies lowered their prices, people wouldn't necessarily spend more, but they would get more for their money.

But, then the companies would make less profit. They would then have less to spend on their workers' salaries. So, people would have less money to spend and they would be buying less things again. Then the companies would make even less money, pay lower wages, etc.