Business Economics of Iceland Ltd : Report
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Added on 2020-01-21
Business Economics of Iceland Ltd : Report
Added on 2020-01-21
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Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1.1 Explain the economic problem of scarcity and demand resource allocation......................3P1.2 How equilibrium is achieved in the market........................................................................4P1.3 The importance of differing market system........................................................................4P1.4 The role of opportunity costs in order to make the economic decisions............................5P1.5 Importance of elasticity in the market interaction..............................................................5TASK 2............................................................................................................................................6P2.1 Explain the implications of pricing and business objectives on its operations...................6P2.2 How prices can be set in different kinds of market structures............................................6P2.3 Analyse how operations decisions and market structure affect the business performance7P2.4 How UK regulations can affect the market structure and company...................................7TASK 3............................................................................................................................................8P3.1 How the structure of UK economy has changed and how it affect the businessenvironment.................................................................................................................................8P3.2 Tools available to meet macroeconomic policy challenges................................................8P3.3 Success of a government’s policies in achieving macroeconomic objectives....................9P3.4 Evaluate the economic performance of an economy in the global market.........................9TASK 4..........................................................................................................................................10P4.1 Theory of comparative advantage.....................................................................................10P4.2 Advantages and disadvantages of free trade for development..........................................10P4.3 Analyse the impact of emerging economies on the developed economies.......................11P4.4 Evaluate the impact of recent domestic and global economic shocks..............................11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13.......................................................................................................................................................14
INTRODUCTIONEconomics is a science that is used to study the distribution, consumption and productionof the scare goods and products. It mainly focuses on the behaviour of different economic agentsand how economics works at the marketplace. Business economics is used to deals with thedifferent issues and challenges that are faced by the corporations. It studies the role of differentfactors such as supply and demand (Newbold, Carlson and Thorne, 2012). Along with this, italso explains that how scarcity can affect the operations of an enterprise. Managerial economicsidentify the factors which may affect their decision making process. Through this, they will beable to achieve their goals and objectives. The present report is based on Iceland Ltd whichperform their operations in retail sector. They are offering their products and services in UK. Inthis context, report explains the role of supply and demand in the economy. Along with this, itfocuses on the elasticity of demand and its importance at the time of interaction in the market.Furthermore, it explains that how UK economy is get changed and this affect the operations ofbusiness organization.TASK 1P1.1 Explain the economic problem of scarcity and demand resource allocationEconomic is a science where an economist studies the behaviour of human on the basis ofthe relationship between ends and scare means. Economic problem is related to the scarcity thatthere are insufficient resources in order to fulfil the unlimited needs of the people. Sometimes,when demand and supply are not met then due to this this problem arises. Scarcity is a biggestissue that is faced by the business organizations as they are not able to fulfil the wants of humandue to limited resources (Summers, 2014). For this, the top executives of Iceland sLtd have tomake effective decisions regarding to the allocation of the resources so that basic requirements ofthe people can be accomplished. Scare commodities are the one which have non zero cost and itis consumed by an individual. It is the responsibility of company to allocate the resources as per the demand of peopleso that their expectations can be fulfilled. Along with this, goods should be supplied in anefficient manner so that a balance can be strike between the supply and demand. Through this,economy of the country can be managed and due to this their overall growth can be improved.
P1.2 How equilibrium is achieved in the marketThe demand and supply both play their important role in the overall economy of thecountry as through this their growth can be improved (Vasant, 2012). The demand and supplymodel is used by the economist so that they can determine the price of the products. Whateverprice is set from this model is known as equilibrium price which is a kind of agreement betweenbuyer and seller. On the basis of this, an enterprise will be able to enhance their growth and dueto this their brand image can be improved. This kind of model is used by the manager of IcelandLtd in competitive market where there are many buyer and seller. Through this, the firm canmake their distinct image at the marketplace as compare to other competitors. On the basis of demand and supply, the equilibrium in the market can be achieved bysetting the relevant prices. If a buyer wants to purchase the products in bulk then it is available atthe flexible price and they wants to buy less then it is also available at prevailing price as throughthis equilibrium can be gained. So, in this manner a balance can be gained between the supplyand demand. P1.3 The importance of differing market systemMarket system is a kind of process where all buyers and sellers are interact with eachother so that they can make an appropriate deal. In this system, overall rules and regulations hasbeen followed by the people so that operations can be accomplished in smooth manner. It is theresponsibility of owners to identify that in which market they are performing their operations sothat their growth can be improved (Acs and et. al., 2011). Some of these markets are like perfectcompetition, monopoly, oligopoly and monopolistic. The differing market system have someimportance are like:On the basis of market system, the resources are allocated in an efficient manner so thatoverall wants of the people can be fulfilled. If customers desires are satisfied thencompanies can survive for a long time. Companies perform competition with each other by providing the different services to thepeople as per their choice. Through price mechanism, overall resources are distributed for the products that arehighly recommend in the market. In order to perform well in the market, organizations offer more innovative or qualityservices to the consumers so that customers can be retained for a long time.
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