Ask a question from expert

Ask now

Economic Principles and Decision Making - Doc

16 Pages3156 Words174 Views
   

Added on  2021-05-31

Economic Principles and Decision Making - Doc

   Added on 2021-05-31

BookmarkShareRelated Documents
Running Head: ECONOMIC PRINCIPLES AND DECISION MAKINGEconomic Principles and Decision MakingName of the StudentName of the UniversityCourse ID
Economic Principles and Decision Making - Doc_1
ECONOMIC PRINCIPLES AND DECISION MAKING1Executive Summary Business often considers business expansion in a new location. The location choice depends onthe favorable economic and business condition of the concerned location. Schmeckt Gut hasinitiated a plan to launch its Besser energy bar in the Atollia market. The company is concernabout the expected sales in the new market. Prior to make an entry in Atollia market, demandneeds to be estimated. For this, market research is conducted to obtain information on income,tariff, inflation and number of gyms. The demand for energy is modeled with three variables;income, inflation and tariff rate. Income has a positive association with demand while tariff andinflation has an inverse relation with demand.
Economic Principles and Decision Making - Doc_2
ECONOMIC PRINCIPLES AND DECISION MAKING2Table of ContentsIntroduction......................................................................................................................................3Matching projection on income, inflation and tariff rate.................................................................3Supply and demand......................................................................................................................4Model of aggregate supply and aggregate demand.....................................................................6Phillips Curve..............................................................................................................................7Laffer curve.................................................................................................................................8Evaluation of potential impact of income, inflation and tariff on demand....................................10Recommendation...........................................................................................................................12Conclusion.....................................................................................................................................12Reference list.................................................................................................................................14
Economic Principles and Decision Making - Doc_3
ECONOMIC PRINCIPLES AND DECISION MAKING3Introduction Different economic variables play an important in decision making process of a business.Depending in the underlying economic scenario, the organization makes their location decision.Volume of sales depend on the demand of the concerned product. In demand estimation, anumber factors are taken into consideration. The main factor determining purchasing power andhence demand is income. In context of a nation, national income used as a measure to findaggregate demand. The fluctuation in income or demand influence price level of the economy.Inflation rate captures the trend in the movement of price level (Dullien et al, 2017). In case ofgoods imported from outside a nation, the demand is also influenced by imposed tariff on importtariff. The paper is intended to make a projection regarding change in these economic variableson demand of the energy bar in the Atollia market. The information is important for SchmecktGut that plans to introduce Besser energy bar the Atollia market within few months.A market research is conducted on Atollia market. The findings of market research withthe aid of economic theories are used to analyze the likely impact of changes in income, inflationand tariff on demand. The analysis aims to provide some useful insight to the company beforelaunching the energy bar in Atollia market.Evaluation of potential impact of income, inflation and tariff on demandA projected increase in income comes with a projected increase in import tariff andinflation. In order to model the relation of demand for energy bars with income, inflation andtariff rate a multiple regression analysis is conducted (Keith, 2014). In the regression modeldemand is taken as the dependent variable and income, inflation and tariff rate is taken asindependent variables.
Economic Principles and Decision Making - Doc_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Economic Principles and Decision Making
|16
|4007
|132

ECON6000 Economic Principles and Decision Making
|25
|4463
|69

ECON6001 - Economic Principles and Decision Making : Report
|16
|2797
|55

Economic Principles and Decision Making Assignment
|12
|2200
|359

Impact of Schmeckt Gut Energy Bar Availability on Demand in Atollia
|6
|1189
|1

Impact of Economic Variables on Demand for Schmeckt Gut's Energy Bar
|21
|5472
|258