consider a remote town in which two restaurants, all-you-can-eat café and goodgrub diner, operate in a duopoly. both restaurants disregard health and safety regulations, but they continue to have customers because they are the only restaurants within 80 miles of town. both restaurants know that if they clean up, they will attract more customers, but this also means that they will have to pay workers to do the cleaning.

In financial aspects, a depression is a sustained, long haul downturn in monetary movement in one or more economies. it is a more extreme monetary downturn than a recession, which is a slowdown in financial action through the span of a typical business cycle. a depression is an irregular and extreme type of recession. so depression is always followed by recession but it is not correct to state that a depression always follow a recession.