Changes in business cycle affects business

• During booms

  Businesses can raise prices. This increases profitability, and it slows down demand a bit.
• In a long-lasting boom


  Businesses invest in production facilities to increase capacity. They may come out with new products to take advantage of increased consumer income.
• During recessions


  Businesses may make workers redundant to save wage costs and increase capacity utilisation (see p.84-85).
• During a local recession


  Businesses can market their goods elsewhere in the country-a local shop could market online.
• In a national recession

  Businesses can market their products overseas.
• When a national recession or slump lasts a long time


  Some businesses choose to relocate abroad.
• In general, global upswings provide growth opportunities for everyone, and global recessions are bad for everyone.