Microeconomics Approaches : Report
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Added on 2020-01-16
Microeconomics Approaches : Report
Added on 2020-01-16
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MANAGEMENTECONOMICS
Table of ContentsINTRODUCTION...........................................................................................................................3PART A...........................................................................................................................................3a)..................................................................................................................................................3b)..................................................................................................................................................4c)..................................................................................................................................................6d)..................................................................................................................................................7e) .................................................................................................................................................8f) ..................................................................................................................................................9PART B..........................................................................................................................................11Brief History of Next PLC.........................................................................................................11Company can opt Market structure which is perfect competition.............................................12Company using Monopolistic market structure.........................................................................14Similarity in both the structure..................................................................................................15Nature of industry in which Next PLC operates........................................................................16Recommendations......................................................................................................................16Conclusion.....................................................................................................................................17REFERENCES..............................................................................................................................18
INTRODUCTIONBusiness dynamics is an integral part of an organization which will further helpful for anenterprise in assessing the business performance of an enterprise. The economics has improvedthe existing business of an entity by utilizes its unique concept. TSG Pharmacy has been selectedfor this project report in which economical tools and technique are used in order to ascertain themajor market forces such as supply and demand of the products offered to the variety ofcustomers. This project report is all about explaining the role of the business in accordance withthe external market approaches followed by the business entity. This report is stresses on themicroeconomics approaches such as supply and demand of a product. This project hasemphasized on the prices of a product or income earned by the business enterprise. The businessis based on the external market operations as the customers are pleased in order to providebenefits to purchase the products by strengthen the existing business capabilities andperformance linked with market practices conducted by an organization. This report is alsotresses on the different market structures which will modify the future business action as per thecurrent action taken by an entity owner in order to enhance their further business positions.PART Aa)As business consultant of TSG pharmacy business which produces TSG caplets in orderto lease variety of customers by catering different services (Bindi and Nunes, 2016). The sales isregarded as one of the important tool in the business which showcases the ability of anenterprise. The sales are forecast in order to seek future business opportunities by relying on thecurrent skills and abilities in order to generate higher amount of sales and the revenue. The costreduction strategies are framed by the individual in order to save the business from externalmarket impact that affect an entity's performance.The term elasticity is a measure which helps in defining the quickness created in thevariables in relation with the external market turbulence (Ljungholm, 2016). It helps in assess thechanges created in the variable with the increasing effect of the external market. This particularmethod will identify the existing capabilities of the business in order to create significant
changes in the price of a product or services. This elasticity is a quantitative proportion of twovariables in the percentage forms.The current business is based on ascertaining the price elasticity of demand of the capletsproduces by TSG in order to form their business decision without getting affected with theexternal increase or decrease. This is regarded as the micro economics concept as the demandand the price of a product or services are properly explained in the current business.The current problem of this business is assessed the business ability in order to predict thechanges takes places in the existing sales level of an entity.Elasticity of sales=% change in sales/Percentage change in the sample population% change in population= New population-existing population(Old population)*100=(140000-130000)/130000*100=7.69%Elasticity of sales= % change in sales/Percentage change in the sample population=0.80= %change in sales/7.69%=% change in sales= 7.69*0.80= 6.15%It has been observed from the above analysis which is based on defining the new increaseor decrease in the existing sales level of an enterprise (Chatterji, Jager and Rima, 2016). Theabove mentioned analysis has shown that the increased in the population will result into increasein the level of sales by 6.15%. It is clearly seen that the customers are essential in order toincrease the existing sales level of the business. The business produces their products or servicesin order to cater the needs and expectations of different set of customers. The TSG needs to focuson getting higher level of customer satisfaction among the customers as this can enhances theexisting level of the business of an enterprise.b)The price elasticity of demand will know the level of changes takes places in the existinglevel of demand in relation with the minute differences incurred in the demand among thecustomers (Oyer, 2016). The price elasticity of demand is a framework that defines the measureof responsiveness which test the dependability of one variable with the changes incurred inanother variable.
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