The microeconomic implications of the crisis on our company can be broken down into two main areas; costs and demand. In terms of cost, the effects are both direct (such as materials prices) and indirect (such as higher unemployment leading to fewer qualified employees). On the other hand, demand has seen a decrease in consumer spending due to job loss and increased uncertainty about future economic conditions.

These changes have already had an effect on our company’s profit margins with decreased sales volume directly impacting our bottom line. Furthermore, these changes are likely to be felt in the long term as well if trends continue; for instance we may need to adjust pricing strategies or find more cost-effective suppliers in order to remain profitable over time.