Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help responding to my peers. The information below is from my peers. Cyclical industries are the opposite of defensive industries. Cyclical companies' revenue
I need help responding to my peers. The information below is from my peers. Cyclical industries are the opposite of defensive industries. Cyclical companies' revenue is highly dependent on the strength of the overall economy. There are normally sharp rises or falls in demand following business and economic cycles for cyclical industries which is why they rely heavily on a positive economic framework to generate profits. For example, the airline industry would be considered a cyclical industry as vacationers are less likely to fly when the economy is suffering. The COVID crisis in 2020 led to a collapse in international travel. On the other hand, defensive industries are stable and perform well even during economic downturns as their performance is not dependent on fluctuations in economic activity. For example, industries engaged in consumer staples would be considered defensive, as consumers will still need to buy groceries even if the economy is crashing. According to research, the COVID crisis forwarded the demand for staple products as it pushed consumers toward "pantry stocking
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started