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If technology causes a significant reduction in the cost of typical bread, explain why the typical...

If technology causes a significant reduction in the cost of typical bread, explain why the typical
burger’s cost in 5 years could still be the same as it is now?

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Answer #1

The answer is inflation. If the current cost of the burger decreases due to improved technology but there no further technological gains in the next 5 years. And if at the same time, there is positive inflation for the 5 years, the cost of the current ingredients other than bread (like vegetables and sauces and cheese) in the burger will increase. This increase in the cost of other ingredients will compensate for the cost savings due to technology and the price of a burger will still be the same as it is now.

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