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Business Economics - Doc

Added on - 08 Dec 2020

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Business economics
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1TASK 2............................................................................................................................................3Economic policies canshape business strategy...............................................................................................................3CONCLUSION................................................................................................................................4REFERENCES...............................................................................................................................6
INTRODUCTIONIn economic term, the concepts that uses theory and quantitative approaches in support ofanalysing business of an enterprises, factors contributing to organisations structure andrelationship with other elements such as capital, labour and market is known as businesseconomic (Sahut and Peris-Ortiz, 2014). In this report, explanation of market imperfection andmarket failure that impact the entrepreneurship activity, labour and financial product arediscussed. Apart this, the interpretation of sugar tax of UK government help in business strategyand decision made by management is discussed.TASK 1In business term, tax is one of the mandatory financial duty that is imposed bygovernment of a specific nation on organisations and individual so that funds can be raised tomeet the public expenditure. From the case study, it has been observed that there is important toimposed sugar tax on soft drink as it would be beneficial for the country, people and overallgrowth of economy. Overconsumption of sugar in soft drinks can lead to different health issuessuch a obesity, diabetes, heart diseases and also reduces the productivity of labour and increasingabsenteeism for companies. In recent time, it has been observed that main market failure linkedwith the consumption of sugar like in soft drink is overconsumption that is because of negativeexternalities and imperfect information. In case if customer do not consider these negativeexternalities than individual may underestimate the social cost of drinking soft drinks. In case ofmarket imperfect or imperfect information due to which customer might consume more andmore soft drinks as they are not aware about long term problems of drinking these drinks. It istherefore for the UK government to imposed such a tax on these drinks that would reduces thesales of fizzy drinks and help government to collect decent amount that can be spent on othercrucial activities of nations.In economic, the market failure is a condition in which the distribution of product andservices by the responsibility market is not adequate and it also lead to social welfare loss(Market failure, 2019). The main reason for these situation is due to individual are more obsessto get result in favour of self leading to inefficient result to economy. In case of improperinformation of market and sudden changes in the tax rate or imposition of any new polices it1
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