Maslow's heirarchy of needs dictates that there is an order in which people seek out things to buy. Sustenance and security stand a top that list, while other things like creativity and morality come last.
Some economic activities could be seen as non-essential like massages, art galleries, gardening etc.
Assuming everyone has the same income and saving, basic goods producers would have the highest demand and would be able to raise their prices to the most that people are willing to pay. That means people would mostly only be able to work in this sector because most people cant afford to spend money anywhere else.
Without (relatively rich people's) disposable income, nonessential goods and services would have low demand and not reach the economy of scale necessary to become a formally produced product.
Is this a correct or faulty assumption?
If we didn't have rich people, would that eliminate a lot of non-essential services in the economy?
byu/Single-Purpose-7608 inAskEconomics
Posted by Single-Purpose-7608