Please pardon me if I'm being ignorant, I will love those who studied economics in school to explain this to me.

I ran out of a particular product I routinely used 2 days ago, I stepped out to buy it. To my greatest surprise, the product size was reduced and there was N200 price increment.
I was marvelled, I decided to buy and when I got home and made use of it... The worse happened, the quality was also drastically reduced. (I read the nutritional value of the previous package and the new one)

I was really pissed and angry, how can company reduce quantity and quality and still increase price? Isn't this dubious?

The previous product was 170g, while the new one they wrote 160g, but that's a fat lie. If you compare the both package you'll know the new one is way below 160g.
I don't have a scale, but I used tape-rule to measured the both packages. 2.5 inches was reduced from the height and 1.5inches was reduced from the width of the new package.

I've observed this with so many other products and I think it's insanity to reduce product quality and quantity, then still go ahead to increase price.

Is this right? Economics students abi economy professionals please explain this to me.

Institutional criminals are everywhere in different forms and ways

What is happening now in the manufacturing sector is called shrinkflation.

its the process of items shrinking in size or quantity, or even sometimes reformulating or reducing quality, while their prices remain the same or increase.

If they don't reduce quality and quantity with this present economic reality those companies will fold up.

The cost of doing business is so high and most companies are just managing to float. Another thing you will even notice is that even packaging too nowadays is nothing to write home about.

Most of the PET bottles nowadays is nothing to write home about. Especially that Cway water. If it falls down it may just burst open unlike before when PET bottle used to be very solid.

Companies are just doing everything to minimise cost so that they can continue in business.

Inflation bro.... Try dis wit coke,beer,spag,toothpaste,butter and so on. Na den I go knw say u serious

You mean you had time to check all those things? To the extent of measuring the container of a product with a tape....

I'm sure you will know the numbers of sticks in a pack of spaghetti

Like @omihanifa posted, it's called Shrinkflation .

It's happening all over the world and not peculiar to Nigeria.

Desperate times deserve desperate measures.

Omihanifa:
What is happening now in the manufacturing sector is called shrinkflation.

its the process of items shrinking in size or quantity, or even sometimes reformulating or reducing quality, while their prices remain the same or increase.

If they don't reduce quality and quantity with this present economic reality those companies will fold up.

The cost of doing business is so high and most companies are just managing to float. Another thing you will even notice is that even packaging too nowadays is nothing to write home about.

Most of the PET bottles nowadays is nothing to write home about. Especially that Cway water. If it falls down it may just burst open unlike before when PET bottle used to be very solid.

Companies are just doing everything to minimise cost so that they can continue in business.

Increasing prices is understandable, reducing quantity and quality with increment in price It's unethical to me.

Wawelexy:
You mean you had time to check all those things? To the extent of measuring the container of a product with a tape....

I'm sure you will know the numbers of sticks in a pack of spaghetti

Lol, I have an habit of reading the contents of what I'm consuming.

I'm a graphics designer, I read, studied and admire the designs of product packages.