B. The Business Cycle, Employment, and Income 1. The business cycle is the pattern of economic activity created by successive stages of prosperity, recession, and recovery. During a recession, production slows, businesses cut back, and customers slow buying. Customer seek out private label products during recessions. Marketers must also consider what people can afford.
Disposable income is the amount that remains after paying taxes.
What's left over after necessities is discretionary income , money that can be saved or spent. C. Resource Availability and Inflation 1. Also important is the amount of resources available to both consumers and organizations. To cope with shortages, marketers use demarketing , a type of marketing that discourages demand for products in short supply. Higher demand and higher prices can fuel inflation , a decline in the purchasing power of money due to rising average prices.