Management Economics: Factors Influencing Demand for General Motors

MANAGEMENT
ECONOMICS
Assessment 1

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
1. Pick a business that you know something about or can find information on. Describe the business
and its main product or service................................................................................................................3
2. Identify Demand and Market Equilibrium. For each of the factors that influence Demand, describe
how your main product or service is affected. Does the factor indicate that demand is increasing or
decreasing?..............................................................................................................................................4
3. How factors influence the products and services of General Motors.................................................10
CONCLUSION.............................................................................................................................................13
REFERENCES..............................................................................................................................................14

INTRODUCTION
Management economics describes market management as a philosophy that allows a
productive combination of key components such as sales and spending, capital etc. In fact,
management within an organization follows this definition, which includes a variety of primary
ideas and decision making techniques, to address certain business-related issues (Teece, 2019).
In other words, M.E. is one of the key principles that distinguish various economic theories as a
contrast of market strategies in order to make rational decisions. Such choices are focused on
cost savings and productivity maximization by productive companies and outputs. The report
would focus on how the market economics principle is utilized by businesses to understand their
previous behavior and to predict potential company success. General Motors is selected in the
report that work with the car market as it is based in many regions, where availability of raw
materials and shifts in economic conditions have a greater effect on the product production.
Different factors which help to determine whether the demand for GM products is elastic or
inelastic are assessed in this report to explore this subject.
MAIN BODY
1. Pick a business that you know something about or can find information on. Describe the
business and its main product or service.
The automobile industry is a most established industry which extends its global
business commercially. Companies engaged in the manufacturing and delivery of
millions of vehicles, trucks and other transports per year in different nations (Sfeir-
Younis, 2019). Essentially, this will further grow a country's economies and lead greatly
to creating opportunities for millions of citizens explicitly or indirectly. For fact, the
automotive sector is often liable for gasoline or oil use. Therefore the selected automobile
field is more beneficial in the analysis of the principle of managerial economics, as it
analyses whole aspects essential to the study of them. For instance, General Motors (GM)
is one of America's biggest companies, which is selling its goods around the globe. A
variety of technologies are being produced for luxury car production, like Chevrolet,
GMC, and Cadillac, which enable this business deliver the highest amount of premium
vehicles annually in contrast with other companies.

Economic analysis has determined that GM is among the largest car firms in the world of
which revenues roughly. At over USD192.6 trillion in sales, 9.17 million quarterly
(General Motors accelerate transformation, 2018). This has also shown the competition
for GM goods is stronger than many businesses like Honda, Nissan, Volkswagen and
more.
2. Identify Demand and Market Equilibrium. For each of the factors that influence Demand,
describe how your main product or service is affected. Does the factor indicate that
demand is increasing or decreasing?
There are a range of factors which have ability to impact demand of various kinds
of products and services. This is so because a product is launched in the market and due
to which a vital amount of factors contribute in an effective manner such as customers
need, demand their perspective about product (Grimsrud, Graesse and Lindhjem, 2020).
Hence, this becomes essential for a company to focus on all those elements which have a
significant amount of impact. In the absence of consideration of these factors there can be
a lot of issues for a company to increase demand of products. Among all the factors,
customers are one of the main variable because they are only who can increase the
demand of product. Thus, it is important for above company to consider the below
mentioned factors in an effective manner that can raise demand.
The production and demand for a specific product or service, according to economic
theory i.e. rule on supply and demand, is interrelated. The two dominant concepts are