Economics for Business: Impact of Inputs, Costs, and Perfect Competition Market on Supply of Goods and Services in UK Industry

This report discusses the impact of inputs and costs on the supply of goods and services in the UK industry. It also explains the concept of perfect competition market and its impact on the supply of goods and services. The report further analyzes the production decisions and their impact on the supply of goods and services.

Economics for
Business

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Why inputs and costs impact the supply of goods and services in terms of production
decisions......................................................................................................................................3
Explain the perfect competition market and how it impact the supply of goods and services by
applying in any UK based industry.............................................................................................4
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Economics is the branch of studies which helps in decision-making in the presence of the
scarce resources. They are being use to manufacture the goods and services in the large market
for meeting the objective. Supply refers to the amount of goods which is being offered to the
potential consumer. So they need to emphasis on higher level of profits in the market by
updating their product as per the current tends of the company(Chen and et. al., 2019). This
respective report will cover the cost and inputs that are essential for the supply with the effective
consideration of UK economy. Moreover, it will analyse the production decisions on the supply
of the goods by taking the certain economic condition of the UK. It will analyse the supply of the
products and services in the manufacturing sector.
TASK
Why inputs and costs impact the supply of goods and services in terms of production decisions.
Supply: It is the amount of goods that are being offered by the firms to their prospective
customers and this is majorly depends upon the demand of the market in order to produce in the
market an then sold in the competitive market. It is the basic concept of the supply as increase in
the prices of the goods tends to rise the overall supply of the commodities in the large market as
they are offering better products and services to the customers. This shows the positive
relationship in the supply and the price of the given product as the prices increase it will leads to
increase the overall supply of the goods in the large market. The cost of the goods and the prices
of the raw material, labour leads to increase the overall cost production in the large market. It
defines the quantity supplied to by the firms in order to meet the needs and demand of the target
market.
Law of supply: It states that price and the quantity supply is positively related to each
other as there is increasing prices of the goods leads to increase the overall supply of the
commodity in the large market and vice-versa. It is further shown in the graph.

As per the given diagram, it is showing the positive relationship in the prices and the
quantity supplied. As per the above diagram, It can be said the graph is sloping upwards when
the prices of the goods was at p3 and also providing the supply of the product at q3 due to
increase in the supply the given goods in the large market.
Inputs: These respective factors are divided into four categories that includes capital
entrepreneurship labour and land which helps in measuring the the gross domestic product in the
UK economy.
 Land: . It is the the resources that can be found on the earth which is being used for the
crops or the establishment of office interest lecture but when it's come to the economic
level of the nation it becomes wider perspective and also includes the river solar energy e
oil si school which are renewable and nonrenewable sources.
 Labour: It includes the abilities of the employees which is being fully utilised with the
aim of producing product and services. This is basically based on the age of population
and working of an individual which is being measured as per the output given from an
individual in their job role.
 Capital: it is the that amount of resources which is used by the form in order to produce
the goods and services and includes equipment commercial building machinery etcm
 Entrepreneurship: . It is the the designation or the ability of the individual to face the
uncertain risk while producing the goods and services to be sale in the large market.

Costs: The overall expenditure of the expenses incurred on the production of goods and services
that also includes manufacturing expenses labour cost and raw material.
Production Decisions: These are the certain decisions which are taken by the entrepreneur in
order to benefit their customer as well as the company.
Impact on the production Decisions:
1. Labour charges: These are the certain decisions which have to take in order to supply
the product and services on time which also enhance the overall efficiency of the
employees and ultimately contribute in the gross domestic product of economy. It shows
the total production of the product to be sold in the market which leads to enhance the
living standard by increasing the wages and reducing the overall cost of good in the
market. Orange cotton span the prices of the given both increases then it directly impact
the overall GDP of the nation and this has been seen in the year of 2010 at the crime of
aggression there was a availability of the goods in the market.
2. Capital: Use of supply can be incline with the increase in the time so it is necessary to
take the appropriate decision related to the supply of product and services in an
appropriate manner. It is also needed that the proper infrastructure its to be given for the
development of the nation and the government authorities will issue the budget in order
to provide the certain resources when needed. This can negatively impact the UK
economy due to the delay in decisions and the mis management of top level management.
3. Raw materials: The item that has to be given within the set time frame so that it can not
lead to delay in the production of goods and services which can suffer the whole
economy and reduced the national income of the country. It is seen that UK is the most
support economy in the year of 2020 due to the unavailability of raw material which
brings down the export of the nation through huge losses.
4. Entrepreneurship: The respective factor is based on the opportunities willingness in
order to grab the specific position in the nation with the consideration of running a
particular business. The certain alliances are formed against the government and there
was distortion in the nation which turn down to reduce the economic condition in the UK.
This implies due to the the ineffective decision related to the production as the people of
the country are not satisfied and the the certain trade unions were formed which badly
influence the overall supply of the commodities.

Explain the perfect competition market and how it impact the supply of goods and services by
applying in any UK based industry.
Perfect competition is refers to the market in which large number of buyer seller are
present who is also showing the portfolio in cost efficient arrangement of the various sources of
economics. It is the serving partners as the standards in which they are competing with the
brands who are offering similar products. It is the formal description of the assessments in which
competitors are at their highest possible level as they are offering homogeneous effects with the
existence of the customers. It is the hypothetical conditioning as seller is fixing their prices on
the basic of market rate. It is the extreme perfection which exist in the external places who is also
incline with the similar products to be sold in the market over the particular period of time.
Supply curve in the Perfect Competition:
It is the curve which shows the portioning of the marginal cost that is lying in the cost
graph and also also showing the minimum of the mean changeable pricing which also the
inclusion of the marginal and the total cost and revenue that is being used by the from to increase
their overall profitability in the market(Clemons, 2018). Total and marginal revenue are the key
terminologies which defines the profitability of any organisation in the large marketplace.
 Short-run Manufacturing Decision-making:
It is the given time duration in which one factor is fixed and other is variable in nature as
there are three aspects which affects the short-way decisions are revenue, costing variable and
shutdown of the certain procedure. It is highly competitive market which shows the marginal
cost curve-line above or at the shutdown point that is also showing the economic level of the
manufacturing industry.

The above curve is showing the short-term supply curve in the perfect competition
market and this is also analysed that the line which stays at or above the shutting dot which also
giving the profitability. When the company is not having the overall consideration to the large
marketplace and the graph-line is below the specific point so this is not related t the products that
are manufactured in this range.
 Long-run Production Decision-making: It is the aspects which is related to the time in
which all the aspects of costing and manufacturing unit are variable in nature. This is the
category which also estimate the overall category in the large market as the series of
existing market's short-run curve. This is also having the connection with the certain
point of invariant in the market of specific period of time. This is also having three
aspects which are included in productivity cycle are given below:
1. Increasing return to scale.
2. Constant scaling-return.
3. Decreasing returns to scaling.

The above diagram shows that manufacturing companies are effecting due to the short-
term revenue and profits which is also having supernormal benefits in the market. It is having the
certain condition of having proficiency in their log-run production.
Manufacturing industry of UK:
The business enterprises that manufacture the goods and services in the UK market is
having huge diversity(Altavilla and et. al., 2018). It is made up of different set of product range
in the sector which includes fast moving consumer goods, furniture and technology etc. they are
having the certain value of economic condition in the nation and also reflects the value and the
production which leads to have more income in the nation. It is the third largest manufacturing
sector of UK after services and retail industry.
Impact of the perfect competition market in supply:
 Prices: these are the main consideration of the market as no one can change the prices of
the product in the market so the firms needs to have more consider ion while fixing the
prices of the goods within the set time frame. For instance, there is manufacturing
company IKEA, which is dealing is assemble furnitures so the supplier of the company
have to concern about the particular prices in which they are offering the goods to the
buyers and also reduce the prices until it is meeting the cost of the products in the market.

This leads the buyer to purchasing of the certain goods till then they are meeting the
satisfaction of the potential customer in the large market. Until the suppliers has to come
to that level of point in which they are clearing price that means the demand of the items
which is equal to the certain number of products at the same prices.
 Competition:There are large number of buyer who is offering certain types of goods and
also having the uniqueness in their products. As the competition is being influenced by
the number of buyer and the seller and the given prices of the goods to the retailing
companies by the companies will be low in cost and high in quality which also effects the
supply of the given goods and services in the large market(Ahmad and Abdullah 2021).
The other competitors will also reduce cost of their goods so that they can effectively
offer the certain goods to the large group of customer base. This also implies in the
economic condition of the UK market and the large number of seller are in the long run
market.
 Maximize profit: The main consideration of the firms is to increase the profits so that
they can sustain in the large market and also having higher growth and profitability. They
are reducing the cost and by considering the overall supply curve of the manufacturing
sector.
 Number of sellers:There are certain kind of goods in which the goods are being sold in
the large market that means the similar products are being produced by the firms. It is
shown that there are large number of companies in the market which are offering
homogeneous product in the large market place. There is no entry and exit barrier in the
market which is also the great opportunities in order to enter in the large market that have
to be supplied in the large market. There is the high effect in the UK economy which also
sustaining in the market.
CONCLUSION
It is concluded from the above report that supply of the good is having the significant
change in making the best use of certain good and services in the large market. These are the
aspects of the company which influence the labour, capital and land within the UK economy. As
the inputs are the basis of the company which is offering the certain goods and also ensure the
supply of the given goods within the time frame. This also impact the gross domestic product
and the national income of the economy. Moreover, the production decisions also impact the

supply of company which also influence the overall supply of the given goods, the perfect
competition market is the one who is offering homogeneous products and happened to rise the
prices in the market in comparison to their rivals that also leads to increase the capabilities of the
prices structure in the industry.

REFERENCES
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