Importance of Business Economics for Managers: Scarcity, Choices, and Market Structure

This essay discusses the importance of business economics for managers, covering topics such as scarcity, choices, and market structure. It also examines how changes in the economic environment affect decision-making and the behavior of companies.

Business Economics

Table of Contents
INTRODUCTION ..........................................................................................................................3
Main Body.......................................................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business economics is the aspects which study the economic theories, methodology and
reasoning which is being used in order to solve the certain challenges in the current world. This
respective essay will cover the importance of economics to manager and also the detailed
discussion on scarcity and choices which the significance of opportunity cost in the given
business while decision-making(Stage, 2018). Furthermore, it will cover the how certain change
in the given economic environment affect the decisions and the entire behaviour of the company.
Lastly, it will cover the operations of market and influence of market structure of the company
and the strategic decisions.
Main Body
Business economics is the areas which applied economics and evaluates the financial
market which is directly related to the certain environmental issues which is faced by the
business in the target market. These are certain aspects which are covered in the business
economics that includes the scarcity, product factors, consumption and the distribution. Being a
manager, as the main goal of the manager is to have the focus of the team for the better goal &
they must set the certain variation set of abilities and it is linked with the economics with the
help of management and leadership talents. It is being known that manager is having the
significant role as due to it, manager are able to research related to the macroeconomics patterns
and they are rightly monitor the continuous variation in the certain economic environment.
It is basically giving the trade advice to the respective management by which the
monetary policies are being formulated. Additionally, manager are able to have the economic
analysis of their rival firms in the respective market. Furthermore, the scarcity refers to the
availability and the finite nature of the business which leads to indicate that the individual are
having more wants in comparison to the resources that is limited for the both the individual and
the respective society. Other than this, choice is the action of selecting from a variety of the
certain possibilities or one of the certain available operations to a person. In context to company
such as Aston Martin, choice is the ability of the possibilities. Business economics is the certain
study of businesses & variables which leads to have the diversity of the business structures & the
connection with the capital, product market and the labour using the economic tools &
theoretical ideas. As the phase, it is being used in a variety of ways that includes the management

economics, business economics, industrial organisation and many more. Variation in the certain
economy have the major influence on the overall decision-making by which they can ensures the
more consumer, opportunities for expansion, experiencing tremendous and leads to enhance the
overall profitability.
Business economics helps in appropriate strategic thinking and logical decision-making
by which they can maximise the results. This is basically related to the better decision-making
process as it leads to made and help the individual in studying all elements which affects the
overall functionality, success and management of an organisation. On other hand, economics is
related to the production, distribution and the overall use of commodities in the target market. As
the individual can use how to research how people, organisation and the government which is
ensuring the allocation of decisions. Scarcity of resources defined as the disparity among the
availability of restricted resources which efficiently for serving the majority of needs of the
people. As a results, business concerns are compelled so that they can make the judgement on
how the best to distribute resources which effectively for serving the need and the goals of the
government, industry and customer. In context to Aston Martin, scarcity is having the potential
to limited buyer options. Which leads to turn the affects the entire economy.
Opportunity cost gives the clear direction and the guidance which is related to create the
crucial to develop and investment-based judgement which is vital for the ideas in an organisation
such as Aston Martin. Opportunity cost is signifiant in certain economic system that includes the
free market economy as it helps in the easy selection of a feasible choices among all the certain
possibilities(Nakara, Messeghem and Ramaroson, 2021). At such time, opportunity cost is vital
in mixed economic system as it guides the people and businesses to have the better use of the
available resources which can leads to increase the overall economic earning in the market.
As the business external environment defined as the sum total of all the external aspects
which is having the major impact over the decision-making of the company. This is vital for the
company's manager to have the comprehend that how changes in the certain external
environment which is affecting the company. PEST Analysis is being in relation to the Aston
martin so that they can examine the change in the macro environment which is impacting the
overall decision-making and the behaviour of the company in the given target market. As the
external environment is significant in the market in terms of PEST Analysis as it tell managers

and strategies in which the certain market is now & where it is headed in the future. There is the
certain description of the PEST Analysis is context to the Aston Martin:
Political:It is the legal consideration which is related to the political climate which is
handle and formed by the government in the commercial issues. General political stability and
the certain types of laws is being implemented so that they can manage the negative impact on
the Aston Martin and its decision-making of the company.
Economical:In the UK, market economy means that the price signals is being created by
the forces of demand and supply guide and it is being related to the production, distribution and
the investment to the buyers(Barber, 2021). In context to Aston Martin, major factor which is
impacting the behaviour and the overall working of the company is unemployment. Reduction in
the employment rate leads to have the difficulty for the manager while have the decision-making
for hiring. Tax rates are another economic problems which impact the overall decisions and the
mind set of the employees. Increase in the overall tax rates in UK and it means that the
employees are complied to pay more tax for earning more. In context to Aston Martin, this is the
negative influence which is impacting the overall profitability ad the working of the company.
Furthermore, inflation is the other certain issues which influence the overall decision-making of
the company. This is being known that the rate of inflation is having the major impact on the
overall decision-making since it limit the possibility for the spending and they can save as well.
Social: It is being known in the United Kingdom that social components are the aspects
through which the people is vital data and it is critical for making the certain decision making.
Aston Martin is is coping up with the changing demand, choice and the interest of the people of
various generations and all such needed approaches to the company's certain offers(Trinugroho
and Lau, 2019).
Technological: It is the technological environment in the UK which is continuously
increasing. It also provide the chances and the benefits within the Aston Martin. They are
basically operating with new technologies that includes artificial intelligence, search engine
optimization and other related technology. For example, it is having the major influence or the
company for their new market.
Change in the external business environment is having the major impact on the decision
making and the behaviour, as per the preceding argument. As the state of economy is having the
major impact on the business decisions and the overall company and its workplace behaviour at

the Aston Martin. Investment decisions, as the individuals employed by the company and the
degree of interest all influence the decisions made by establishment's company.
According to Barber(2021), is made up of institutions, process, infrastructure and the
social connection of the people in which they can rightly participate for the goal of trade.
Marketing operations are being claimed as the effective business programs also the yearly
strategy planning and the certain methods of campaign planning. Market is the place where
buyer and seller come together in order make sell or purchase in the respective market as
company such as Aston Martin allows the delivery of values and in economics, demand and
supply refers to the link between the goods which is being manufacturer in order to sell in the
large market. The fundamental model of analysing the pricing is the supply and demand which
are the economic theories. Demand and supply are regarded as the fundamental drivers which is
based on the economic theory.
As the manner in which the certain sector are defined and differentiated as it is based on
the kind of competitors as they are regarded as the market structure. Perfect competition is the
market in which large number of buyer and seller are operating their business in the market and
there is not barrier in the entry and the exist of the firms as they can withdraw their business
when they are feeling so. Perfect competition is the freedom of choices and the standardisation of
the industrial output and the absence of any company with the major market share. Monopolistic
market is the absence of any company with significance of the market share. It is the major
consideration in the market which is defined as the market in which large number of buyer and
seller which is ensuring the graphic that the rising cost, there is the more quality supplies in
comparison to the demand which resulting in minimising the prices of the seller. In context to
Aston Martin, equilibrium is reached as when the quantity of products which is being delivered
is same as the quality of products delivered. As the given prices are at equilibrium then the
quantity demanded is higher than the supply.
Monopolistic competition is attributed as the imperfect customer information as the large
number of companies, goods and prices, somewhat different offerings and the certain profits.
The importance of strategic behaviour is the overall consideration in the market which is related
to the behaviour distinguishes oligopoly(Baker Kumar and Pandey, 2021). Companies can
change the supply and the pricing and quality and promotion which need to acquire an advantage
over the rivals in such market structure. Monopoly is the market structure in which there is full

control over the market as the prices of goods can not be changed and manager at Aston Martin,
For example better engagement is business activities with the effective market competition
market.
CONCLUSION
It is being concluded that business economics helps in the development of relationship in
the certain economic factors which includes the market structure, income and many more.
Scarcity can be implemented as the demand of the goods exceeds the overall supply in the given
market, limiting the options accessible to the certain customers and hence this regulate the
overall economy. market structure is important as it influence on market which results by
influencing opportunities and decisions by the economic participants in the concerned market.

REFERENCES
Books and Journals
Baker, H.K., Kumar, S. and Pandey, N., 2021. Thirty years of Small Business Economics: A
bibliometric overview. Small Business Economics, 56(1), pp.487-517.
Trinugroho, I. and Lau, E. eds., 2019. Business Innovation and Development in Emerging
Economies: Proceedings of the 5th Sebelas Maret International Conference on
Business, Economics and Social Sciences (SMICBES 2018), July 17-19, 2018, Bali,
Indonesia. CRC Press.
Barber, B., 2021. The absolutization of the market: Some notes on how we got from there to
here. In Constructing the Social System (pp. 217-234). Routledge.
Grégoire, D.A. and Cherchem, N., 2020. A structured literature review and suggestions for future
effectuation research. Small Business Economics, 54(3), pp.621-639.
Nakara, W.A., Messeghem, K. and Ramaroson, A., 2021. Innovation and entrepreneurship in a
context of poverty: a multilevel approach. Small Business Economics, 56(4), pp.1601-
1617.
Devine, P.J. And et. al., 2018. An introduction to industrial economics. Routledge.
Stage, S., 2018. 1. Ellen Richards and the Social Significance of the Home Economics
Movement. In Rethinking home economics (pp. 17-33). Cornell University Press.