Microeconomic Concepts and Model for Outdoor Toy Company

This report discusses about the company Outdoor Toy which is engaged in production of large toys such as swings, trampolines and climbing. It explains the concept of microeconomics and its application in the business situation of Outdoor Toy Company. It covers topics like cost analysis, resource allocation, demand, supply, and economic profit.

Economic Concepts and
Model

Table of content
 Introduction
 Business situation using microeconomic concepts
 Concept of microeconomics
 Microeconomic Theory
 Demand
 Supply
 Conclusion
 Reference

INTRODUCTION
 This report discusses about the company whose
name is Outdoor Toy which is engaged in
production of large toys such as swings,
trampolines and climbing.
 The owner of this company is James Owen. The
transportation costs have increased so that the
prices of such toys such as swings, trampolines
and climbing frames will be increased.

Business situation using microeconomic concepts
 Economics is the study of process by which the
available resource is allocated in an efficiently
manner, the need of unlimited wants can be
satisfying. The Economics has divided into two
parts-
 Micro economics
 Macro economics

Concept of microeconomics
 The micro economic is the study of
individual and organizations. It identifies
how the available resources are allocated
in the people.
 It focuses on small number of units. In
micro economics the following points are
to be considered.

Microeconomic Theory
 Cost analysis: Cost analysis means to identify
the cost in various production levels such as
operations level, size of production output.

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Resource Allocation: The micro economics is a tool of
resource allocation. It means to allocate the resource in best
manner so that produce goods. The resource allocation is an
important factor because the demand can change according to
people need.

Demand
Demand is a tool for the company to identify the demand of
future goods and services on the basis of past factor which
affect the demand. The demand is based on two factors-

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Complementary goods mean those products which is used together. For
example, if demand of tea is increased then demand of sugar is also increased.
But in cases of prices of two commodities if price increases of one
complementary product then prices of other complementary product deceases.

Supply
The price of a product and services have direct
relationship with the supply. If prices will increase
the business wants more supply, and prices will
decrease the business wants less supply the product.

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Economic profit means minus the total cost from the total
revenues. If company wants survive for a long period, then
company needs to change in their business policy either to
reduce the cost of product and choose of new product on the
basis of customer need.

CONCLUSION
In the above report the Outdoor Toys to follow the concept of micro economics that the
company achieve maximum profit at an affordable cost. The company will have
generated indirect employment is related to supply of raw materials and distributions.
To apply the model of microeconomic theory and interplay between socially and
technological innovation.

REFERENCES
 Abapour and et.al, 2020. Game theory approaches for the solution of power system
problems: A comprehensive review. Archives of Computational Methods in
Engineering, 27(1), pp.81-103.
 Deng and et.al, 2019. Does Internet use help reduce rural cropland abandonment?
Evidence from China. Land use policy, 89, p.104243.

Thank you