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Case Studies in Business Economics

   

Added on  2020-12-09

8 Pages2142 Words183 Views
CASE STUDY BUSINESSECONOMICS
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Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31. effect of market imperfection and market failure over the entrepreneurship activity, labourand financial products.............................................................................................................3TASK 2............................................................................................................................................5Impact of sugar tax policy on decision making and business strategy...................................5CONCLUSION ...............................................................................................................................7REFERENCES................................................................................................................................8
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INTRODUCTIONBusiness economics is an approach used to analyse and evaluate affect of differenteconomic situations on business organisations. Economic situations arises due to change intaxation policy, increase in inflation rate and unemployment rate. Business Economics also helpscompany in formulating business strategies. Below case study includes market imperfection andmarket failure on new business ventures, employers and different types of financial productsused in companies. Further, this case study explains impact of introduction of Sugar Tax Policyregulated by government of UK on business strategies and management decisions of companies.TASK 11. effect of market imperfection and market failure over the entrepreneurship activity, labour andfinancial productsMarket imperfectionMarket imperfection is situation in which customers do not have accurate knowledgeabout the market. This situation does not contain a perfect competition (Economic Markets andMarket Imperfections, 2018). Further, as per the market imperfection theory, in the situation ofmarket imperfection, the market fails to meet the rigorous standards of perfect competition. Inaddition, it also contains high leveled barriers regarding entry and exit.Market failure:An economic condition in which supply of products and services fails to meet the need,demand and requirement of the customer, can be termed as market failure. This situation is beingcauses due top inefficiency of the suppliers or companies in allocation of their resources anddetermination of actual needs and demands of their customers. Both situations, i.e. market imperfection and market failure have a major effect over theentrepreneurship activity, labour and financial products as well. Effect over entrepreneurship activity:Due to market imperfection, entrepreneur fails to derive the actual market condition. Itmay cause in developing wrong perceptive towards any specific market. It would result inselection of wrong market for doing business and development of ineffective strategies for thebusiness as well. Further, due to inappropriate and improper information of the market,entrepreneur may fails to detect the actual demand and requirement of the industry, due to whichthey may fail to fulfil the needs and demands of their potential and targeted customers.
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