Economics and Business Strategy

Running head: Economics 0
Economics and Business Strategy
5/17/2019

Economics 1
Contents
Introduction......................................................................................................................................2
Solow Growth Model......................................................................................................................3
Total average and marginal costs....................................................................................................4
Short Run costs................................................................................................................................5
Difference between short-run costs and long-run costs...................................................................6
Long run Producer’s equilibrium.....................................................................................................7
Short run producer’s equilibrium.....................................................................................................8
Long Run total cost curve................................................................................................................9
Returns to scale..............................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

Economics 2
Introduction
This task is related to the strategy of the economic and business used in the maintenance
of the business to make the business successful. This report includes an explanation of the
country including the growth model called Solow. The Australia country is selected to discuss
the various perspectives of the report. The growth model called Solow is used to analyze the
impact of innovation and the technological progress on the proper growth of country. The
economy is very important for the country and the business runs in the same country. The
country’s economic growth is very important for the process and it includes several business
strategies responsible for the growth (Hatfield-Dodds, et. al., 2015). Economy is very essential
for the country to make a good impact on other countries and makes a better position in the
world. The economic growth is responsible for the successful nature of the country and it makes
a strong position in the world business market.
The economic and technological progress gives the great impact of innovation and
increases the economy of the country. The innovation is very much important for the overall
growth of the country and improves the overall business of the specific country (Van den Berg
and Lewer, 2015) The continuing innovation of the country will be responsible for increasing the
business strategy and the economic strategy that makes the overall business growth stable.
Economic progress is increased by using the innovating process and the country can achieve
overall growth in the market.

Economics 3
Solow Growth Model
The growth model of Solow is a model used for identifies the economy that maintains the
changes occurred in economy of the country and it affects the growth rate of the population, rate
of savings and the technological progress rate. This model totally depends on the economic
growth of the country and maintains the overall position of the country in the business market
(George, et. al., 2015). The Solow growth model includes the production function that affects the
overall production of the company and affects the growth at a high level. Solow’s model is
depending on the long run growth and it includes the following assumptions:
Production function
The production function plays a vital role in managing assumptions. The production
function give as per the linear homogeneous function of the products of the first degree of the
form-
Y= F (K,L)
Y= Output
K= Capital Stock
L= Supply of the labor force
The above-discussed function describes the production function related to the Solow
growth, which is responsible for the better economic growth of the country (Halsmayer, 2014).
This function is neo-classic in nature and it gives the constant returns to be based in the capital
and the other productivities. The production function is given as Y= F (aK, al). By this
production function, the process of the Solow growth can be managed and it becomes possible
regarding the function of products. The production function can be improved by the proper
growth of Australia.