Imagine a shoe store has a large number of shoes in its warehouse. The store owner believes the economy has peaked and a recession is coming soon.If this is true, what should the store owner do?

Answer:

The store owner should try to sell as many shoes as possible before the recession begins and prices drop. They could do this by having a sale. By selling current inventory now, they can gain cash to help the business survive lower demand during the recession. When the economy hits its lowest point (the trough), the owner could use that cash to expand the business at a lower cost. The owner must also plan for a decrease in consumer spending and demand.