How does automation influence consumer prices?

How does automation influence consumer prices?

Step 1: Understand what automation means. Automation is when machines or technology do tasks that people used to do.
Step 2: Know that production costs are the expenses involved in making a product, like materials and labor.
Step 3: Realize that automation can make production faster and cheaper by reducing the need for human workers.
Step 4: When production costs go down because of automation, companies can save money.
Step 5: If companies save money, they might lower the prices of their products for consumers.
Step 6: However, not all savings are passed on to consumers; it depends on the company's decisions.

Cost Reduction – Automation can streamline production processes, leading to lower operational costs.
Price Pass-Through – The extent to which cost savings from automation are transferred to consumers in the form of lower prices.
Market Dynamics – How competition and market structure can influence whether savings are passed on to consumers.