A user said:
i’m having trouble with a part of my commerce homework
“describe the experiences of the pharmaceutical industry across the various phrases of the business cycle”
it’s a long answer question and i’ve researched and researched but have found no useful information so far.
thank you!!
The business cycle entails the following stages:
- Expansion
- Peak
- Recession
- Depression
- Trough
- Recovery
This can be illustrated using the following image:
Expansion can be defined as the stage where this is an increase in aspects of the economy such as employment, demand, profits and so on. In terms of the manner in which the pharmaceutical industry is affected by this stage, there will be a rise in employment (i.e. more individuals who intend to work in the pharmaceutical industry will be able to do so) and unemployment will increase (i.e. less pharmaceutical professionals will not have a job). Additionally, the industry will witness a larger number of pharmaceutical products being produced, and thus a higher ability to meet increasing consumer demand.
A peak is when the economy reaches the maximum level of growth. In terms of how this applies to the pharmaceutical industry, all aspects of the economy, such as employment/unemployment, supply/demand and monetary conditions would have reached their best possible state. This stage marks the reversal point in the trend of economic growth, meaning that any change after a peak will be a decline, leading us to the recession stage.
A recession follows a peak. During this stage, the demand for goods and services starts declining. In addition to this, other aspects of the economy are affected. For instance, during a recession, there will be a decrease in wages and employment, meaning that professionals working in the pharmaceutical industry will either begin either to lose their job or have their wages/salaries reduced.
A recession is followed by a depression, which is a major downturn in the business cycle. It is characterised by sustained declines in economic activity and detriment to different aspects of the economy, including high rates of unemployment, increasing poverty, lower wages and negative effects on the supply and demand of products. In terms of the pharmaceutical industry, this means a significant number of pharmaceutical professionals will lose their job, there will no longer be good demand on pharmaceutical products and there will be an inadequate supply of those goods (due to a lack of demand and a lack of human resources).
A trough is the opposite of a peak. It is when the economy reaches the lowest level of growth. Regarding the way in which this applies to the pharmaceutical industry, all aspects of the economy, such as employment/unemployment, supply/demand and monetary conditions would have reached their worst possible state.
Lastly, after a trough, the economy starts to recover, marking the beginning of the recovery stage. During this phase, different aspects of the economy start to improve and repair the damage caused by the economic downturn. Demand for products will start to increase and as a result, the supply of those products will also start to increase. Additionally, employment starts rising, which marks a start to the reduction of unemployment rates. Of course, with respect to the pharmaceutical industry, this means that there will be more demand on pharmaceutical products due to the improvement in the buying ability of consumers and as a result, there will be more production (supply) of those products and hence, more pharmaceutical professionals will find employment.
I hope this helps!
