As a selected product to analyze the effect of macroeconomic variables on it, the drug Ibuprofen by Equate, a Walmart-owned sub-brand, will be used. This medicine is in demand among consumers due to its recognized pharmacological formula and affordable price (“Equate Ibuprofen tablets,” 2021). According to Rouksar-Dussoyea et al. (2017), inflation rates, GDP growth, and unemployment are significant macroeconomic variables to take into account in view of their impact on market trends. These variables will be applied to assess their impact on supply and demand for Equate-branded Ibuprofen and Walmart’s overall financial performance.
By comparing the three proposed variables for the United States, one can draw attention to their fluctuations in recent years. Amadeo (2020) provides the official statistics and compares these parameters over the last years. According to the data, GDP growth in 2017 was 2.4%, in 2018 – 2.9%, in 2019 – 2.3% (Amadeo, 2020). The inflation rate in the same years was 2.1%, 1.9%, and 2.3%, respectively (Amadeo, 2020). The unemployment rate was 4.1% (2017), 3.9% (2019), and 3.5% (2019) (Amadeo, 2020). This information is valuable and can help predict the impact of the proposed macroeconomic variables on the supply and demand of Ibuprofen by Equate.
A decline in GDP and an increase in inflation are negative trends that can lead to higher costs of drug production and, therefore, a potential decrease in supply. At the same time, a stable decrease in the unemployment rate in the country is a trend that can have a positive impact on sales and increase demand for this product. For Walmart, these fluctuations are crucial since the company needs to allocate funds to promote the sub-brand. As a result, lower US unemployment may improve the corporation’s financial performance, but inflation and poor GDP growth will inevitably require higher costs of production.
References
Amadeo, K. (2020). US real GDP growth rate by year compared to inflation and unemployment. The Balance. Web.
Equate Ibuprofen tablets, 200 mg, pain reliever and fever reducer, 500 count. (2021). Walmart. Web.
Rouksar-Dussoyea, B., Ming-Kang, H., Rajeswari, R., & Yin-Fah, B. C. (2017). Economic crisis in Europe: Panel analysis of inflation, unemployment and gross domestic product growth rates.International Journal of Economics and Finance, 9(10), 145-154. Web.