Low inflation will allow a company like McDonald's to increase the prices it charges consumers.

Question

Quizplus · Accepted Answer

Low inflation means that prices are not rising quickly, so there is less pressure for companies to increase their prices in order to cover their costs. In fact, in a low inflation environment, companies may actually face more competition from other businesses offering lower prices, so they may need to keep their prices steady or even lower them in order to remain competitive. Therefore, low inflation is not likely to allow a company like McDonald's to increase its prices.

Low Inflation Will Allow a Company Like McDonald's to Increase