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BUSINESS ECONOMICS INTRODUCTION 1 TASK 11

   

Added on  2020-06-04

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BUSINESS ECONOMICS
BUSINESS ECONOMICS INTRODUCTION 1 TASK 11_1
Table of ContentsINTRODUCTION...........................................................................................................................1INTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Explain the economic problem of scarcity and demand of resource allocation formanaging the economy...............................................................................................................11.2 Role of supply and demand in an economy and how equilibrium can help to achieve themarket. ........................................................................................................................................21.3 Evaluate the importance of different market system and the role of opportunity cost. Howthey help to make economic decisions. ......................................................................................21.4 Role of opportunity Cost.......................................................................................................31.5 Explain the meaning of elasticity of demand and assess the importance of elasticity inmarket interaction........................................................................................................................3TASK 2............................................................................................................................................42.1 Explain the implications of its pricing and corporate objectives on its operations. ............42.2 Setting to set the market structure in different market systems. ..........................................42.3 Firms behaviour affects market stricture and operations of the company. ..........................52.4 Impact of UK regulation on market power ..........................................................................5TASK 3............................................................................................................................................63.1 Analyse the structure changes in market...............................................................................63.2 Tools to meet macroeconomic policy ..................................................................................63.3 Success of the government policies in achieving macroeconomics objectives. ..................73.4 Economic performance in the global market........................................................................7TASK 4............................................................................................................................................74.1 Theory of comparative advantage.........................................................................................74.2 Advantage and disadvantages of tree trade for M&S ..........................................................84.3 impact of emerging economic over developed economic.....................................................84.4 Evaluation of global and domestic shocks within economy.................................................8CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10
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INTRODUCTIONBusiness economics is the king of research of monetary problems and difficulties. This isthe most important factor to analyse the actual market position. It handles the business growthtechniques and management. Present report is based on business economics of Mark & Clerk.Mark & Spencer is the leading retail organisation in UK. Furthermore, business economicsinvolves the understanding of the external factors. This report will cover the economic problemof scarcity. Furthermore, it will discuss about the supply and demand. Business economicsmainly concern about the micro and macro factors. This decision mainly related to theorganisation strategies. This report helps M&S to make better planning in relation to economicfactors. These aspects help company to make better planning with respect to organisationdevelopment. TASK 11.1 Explain the economic problem of scarcity and demand of resource allocation for managingthe economy.Scarcity and demand both the factors are very important for the organisation. It impactson the product and services in the market. Scarcity means the shortage of resources as comparedto customer wants(Barney, 2014). Human needs are never going to be satisfied as they alwayswant new and different; nobody can reduce their needs and wants. UK economy has largenumber of desire but the resources are limited. In order to manage the scarcity of resources,company needs to decide planning for allocation of resources. The wants of customer areunlimited in spite of resources. Consumer needs to select only that commodity which giveshigher level of satisfaction. For example, government of UK make extra efforts to improviseeducational standards because National Health Service provides maximum benefits to thesociety. This economic problem affects the business of Mark and Spencer. To overcome fromthis effect, company needs to adopt rational consumer theory through which they can givemaximum benefits to the consumer. According to the research, consumer always prefer thoseproducts and services which give them the best experience and satisfaction. Consumers arerational as they always determine the prices and quality of the products and then make theirpurchasing decision. For example, consumer has low income level in that Mark and Spencerneeds to make cost effective product and services to maintain its sales and profit revenue. Andtry to make cost effective services(Bergs and et.al, 2014).
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1.2 Role of supply and demand in an economy and how equilibrium can help to achieve themarket. Demand and supply are the most important factors in the economy. It helps in makingeffective market and profit revenue for the company. From the effects of these forces, economyget their maximum utilisation of resources. Law of Demand and SupplyAs per the law, demand will decrease when the price of the product goes high; on theother side, demand will go high when the price of product will go down. Furthermore, supplywill do up on the other side prices are also become go up. The relationship between supply andprice is positive as compared to demand(Biondi and Zambon, eds., 2013). The main purpose ofdemand and supply is to provide correct information regarding commodity prices to thecustomers. Equilibrium.At the time when demand and supply is on same position, that level of point is calledequilibrium. At this point, quantity of demand and quality of supply is the same. Organisation settheir product and service prices on the basis of equilibrium when both the elements are on thesame position. Demand and supply are the two main factors which affect the growth of productand services. They both influence each other to determine the prices of commodities.Furthermore, M&S needs to analyse the external demands of customers on the basis of whichthey determine the prices of product and services. Apart from that, market factors also affect thebusiness activities(Buckley, 2016). All these factors help company to set the prices and getmaximum profit revenue. 1.3 Evaluate the importance of different market system and the role of opportunity cost. Howthey help to make economic decisions. Market is the main area where number of companies and customers deal and exchangetheir commodities in terms of money. Furthermore, market is the place where companydetermine its potential customers after analysing their needs and wants of the customers. Perfect Market It is the positive market where number of sellers as well as number of buyers are presentto deal with each other. This perfect market has involved only those products and services which
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