Results from the summer Business Outlook Survey suggest that business sentiment is strongly negative in all regions and sectors due to impacts from the COVID19 pandemic and the drop in oil prices. Firms reported that weak demand is reducing both capacity pressures and expectations for price growth.

Nearly half of all businesses reported an outright decline of their sales in the past 12 months because of the impacts from COVID19, low energy prices and associated elevated uncertainty. This is reflected in a large decrease in the indicator of past sales growth (The Market System and the Circular Flow). As the effects from the pandemic continue, firms expect slower sales growth ahead (Demand, Supply, and Market Equilibrium, blue bars). More than half of all businesses anticipate their total sales over the next 12 months will be lower compared with the past 12 months. These expectations are backed by a sharp deterioration in indicators of future sales (such as sales inquiries and order books) (Demand, Supply, and Market Equilibrium, red line). Now at a record-low level, future sales indicators are suggesting a notable decline in sales growth in the near term. Softer sales expectations are widespread across all regions and sectors, with firms often expressing a high degree of uncertainty about consumer behaviour and future demand. Weakness is most prevalent among firms in tourism-dependent, finance and real estate industries as well as those linked to commodities, particularly energy. However, many businesses expect the weakness in their sales to be temporary and not extend over the entire 12-month period ahead. Half of firms anticipate that their sales will mostly recover within the next year as pandemic-related impacts recede (Box 1). Most of these businesses either reported a drop in their past sales or expect future sales to be lower, but not both.

Instructions:

Open the following link, read the full article: https://www.bankofcanada.ca/2020/07/business-outlook-survey-summer-2020/

Review topics covered in Perfect Competition in the Long Run to Technology, R&D, and Efficiency related to the 4 market structures of competition

Provide an opinion about how market competition will be reshaped in the near future, which structure will resist more and why?, which will be hurt the mostand who do you expect will be thepost-pandemic winners and losers?.

Support your evidence with facts and external sources and refer to MICROECONOMICS to explain your arguments.