Microeconomics: Economic Concepts and Models - Desklib

This presentation on Economic Concepts and Models focuses on microeconomics concepts such as demand, supply, cost and production. It explains how these concepts impact the business environment and affect decision making. The presentation uses a case study of trampolines to illustrate the impact of rising transportation costs on the cost of goods and services.

BMP4003 Business Environment
Assessment 1 - Individual Presentation

Article Review - Economic Concepts And
Models
Name:
ID:

Contents
• Introduction
• Microeconomics
• Concept of Microeconomics
• Demand
• Supply
• Cost and Production
• Conclusion

INTRODUCTION
• usiness environment refers to an internal and e ternal factor of theB x
organisation and fi rms which affects the business.
• oth factors can work together for the growth of the companyB .
• ames wen wants to say that if the transportation cost increases asJ O
well as the hauler cost then it will have a negative impact on the
trampoline prices.
• he price of toy will increase by so he will have to charge highT 40-50%
from the customer n that case consumers will not prefer to pay a. I ,
heavy price for this consumers.

Microeconomics
• t is the social science studies thatI
relate with the behavior of
individuals manage and,
organisations which helps in
making the decisions and allocating
the factors.
• enerally it applies on the goodsG ,
and services of the company t. I
trades with economic crises or
obstacles.

Concepts of Microeconomics
• Demand
• Supply
• Price mechanism
• Theory of production
• Marginal utility and demand

Demand
• Adam smith is a great economist who
give the concept of law of demand
and Supply.
• Demand refers the desire and ability
of the customers to buy products and
services at predetermined price.
• Law of demand: According to ceteris
paribus law of demand states that
there is inverse relationship between
price and quantity demanded.

Supply
• Supply is the disposition of the seller
to sell product and services at a
given cost.
• Law of Supply: ther thingsO
remaining same there is positive
relationship between price and
supply.
• hen price of the product risesW
supplies increases and when price of
the product reduces supply
diminishes.

Continue…
• n this case there is rise in shipping cost which will impact on the costI
of trampolines.
• ames wen businessman of outdoor toys will increase the price ofJ O
trampolines because it has to imports containers toys climbing, ,
frames which will become costly after rising in transportation cost.
• n summer customers will prefer other games rather than trampolineI
because 4
• here is another problem that ames wen is facing which is fromT J O
china that is deficiency of container to hike in prices.0 50 % .

Cost and Production
• Cost means expenses incurred to produce a product or to serve
the services. It is the monetary value which is paid to acquire a
product or services.
• According to the economic fundamental concepts it is the
alternative opportunities foregone in the choice of one good in
pursuit of others commodity.
• Cost function is the relationship between the worth of
production inputs and the value of outputs. Total cost is the total
expenses incurred to make a particular product.

Continue…
• roduction is the procedure of making the goods and services fromP
immaterial inputs which provides value to the consumers.
• t means the transformation of inputs in to outputsI .
• t is the resources needed to produce product such as land labourI , ,
capital entrepreneurship, .
• aw of production means increasing the output which can be done inL
two ways.

Continue..
• n this case increase in transportation will have major impact onI
production.
• Cost of ti cket of trampoline will rise with every additional e pensesx .
• Company will produce some goods in the and price hike ofUK
shipping price will become reasonable to make more.
• he demand of Chinese goods has increased in the internationalT
country which has blocked the e isting shipping capacityx .
• he cost of shipping foot ti n has become tripled on trade worldT 40-
routes.

Conclusion
• As per the above discussion this case study based on the trampolines,
cost.
• he owner of the retailer game industry ames wen faced theT J O
problem due to higher cost of trampolines.
• t affects his game industry cause fi rstly the trampoline has heavy costI
and also it has to bear transport and haulier cost so that internal and
e ternal cost included the cost is high so consumer is not ready to payx
so much amount for this toy.

References
• iloslavo agnoli and dgar An eco critical perspective onB , B , E , 2018. -
business models he value triangle as an approach to closing the: T
sustainability gap ournal of Cleaner roduction pp. J P ,174. .746-762.
• uen and et al A contingency view of the effects of sustainableY . ., 2019.
shipping e ploitation and e ploration on business performancex x .
ransport olicy ppT P ,77. .90-103.
• Avesani Sustainability sustainable development and business, 2020. , ,
sustainability n ife Cycle Sustainability Assessment for Decision. I L -
Making pp lsevier. ( . 21-38). E .

Thank you