Management Economics: Factors Influencing Demand of General Motors Cars

Management Economics

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Overview of General Motors its products/services and history..............................................1
2. Market Analysis of General Motors to evaluate factors which influence its demand............2
3. How factors influence the products and services of General Motors.....................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Managerial economics defines as a concept of business management that integrate the main
components such as income and expenditure, resource etc. in profitable manner. For resolving
any business related issues especially financial, management of a firm use this concept mostly,
that provides a number of key theories and methods to take decision (Girella, Tizzano and
Ferrari, 2019). The present report is going to elaborate how company used management
economics concept for recognising their past behaviour and estimating the future progress of
business. For this purpose, General Motors is chosen that deals in automotive sector, because it
operates business in various countries, where supply of raw materials and changes in economic
structure affects its demand of product in higher way. To investigate this aspect, various factors
are evaluated in present report that also helps in determining whether demand of GM products is
elastic or inelastic.
1. Overview of General Motors its products/services and history
The automotive industry refers to a most developed sector that spreads business
economically at worldwide level (Panayides, 2019). Companies that deal in this era, used to
manufacture and distributes millions of cars, trucks and other transports every year. This would
ultimately help in developing economy of a country, as well as contributing major role in giving
employment to millions of people either directly or indirectly. Along with this, automotive
industry is also responsible for consumption of fuel or oil. Therefore, to analyse concept of
managerial economics, chosen of automotive sector refers to most beneficial as it evaluates
entire aspects that are essentials for analysing same (Saritas, Meissner and Sokolov, 2019). For
example – General Motors (GM) is one of the largest organisation that headquartered in America
but offers its products in entire world. It has created a number of innovations for producing
luxury cars such as Chevrolet, GMC, Cadillac and more, which aid this firm to sales highest
volume of cars as compared to other firms annually.
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From economical research, it has been evaluated that GM is on top most position in the
list of Automotive Assembly Companies, which sales approx. 9.17 millions per year with over
$US192.6 Billions of revenues. So, it has shows that demand of products of GM is higher than
other firms like Toyota, Ford, Volkswagen and more.
2. Market Analysis of General Motors to evaluate factors which influence its demand
As per the economic theory i.e. law of supply and demand, supply and demand of a
particular product or service is related with each other (Ramanadham, 2019). Here, relationship
among these two key terms is known to be market equilibrium which affects highly the price of
products and services. In context automotive industry, there are number of factors present that
influences the demand of relatable goods like private and luxury vehicles. It includes price of
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