Review of Microeconomic Factors and Ryanair's Pricing Strategy

Review of an article and to expand on
the aspects of microeconomic theory

Table of content
INTRODUCTION
Article review
Elasticity
Law of demand
Law of supply
CONCLUSION

INTRODUCTION
Micro economic is a scale of economic theory that can empower and favour the business entity for enhancing
the individual level of potential and capability as a business venture.
The role of the micro economic is to understand the reality of market and guide the company to formulate the
best and advanced level of practices and approaches that can support the best form of overall growth and
development for the business enterprises.
This presentation is based on the case study of Ryan Air Company.
Company is founded in the year 1984.
Company is associated with the airline sector that can empower the people to facilitate through the airline
services at a global level.
The aim of the project is to understand about the different micro economic factors and aspects that can support
the company to approach the best level of business operations that can meet up overall business objectives.

Article review
The article depicted about the sales of the Ryanair Company and its potential changes.
This certainly depict about how the pricing related strategies of company could change and influence the sales of the business entity.
The fares of company are expected to fall that could also allowed the company to attract new potential customers associated with the
market along with the existing customer base.
In the winter season fares are expected to fall down by 7%.
The impact of this fares fallen down is the total expected passengers are now more in number that are travelling with the airlines of
company.
The impact of this is such that the profitability of company could also increase due to the reduced fares that could attract to the potential
customer base in market.
This is a basic nature of economics when the prices come down this certainly increases the demand of product in market.
The previous expectations related tp air fares fall was 2% but the fall was reported as 7%.

Elasticity
This is a core concept belong to the micro economics.
This is a concept that clearly demonstrates that in case a price of one commodity get
increases than this would certain affect positively over the demand of other respective
alternative options in market.
The concept of elasticity is very crucial.
This concept of micro economic clearly reflect that price of the product is a driver that
certainly influence supply and demand of product in respective market.
This is essential in regards to the business venture to take a support of this concept in
respect to drive the overall demand of product in the market.
Price Elasticity of demand clearly state that in case the price of one product increases this
would certainly reduce the overall market demand of the same product.
In case of the price of the product decreases this would certainly boost up the overall market
demand of the same product.
Micro economic has clearly indicated that in case the business entity is looking forward to
increase the demand of product in market than it has to certainly decrease the price of its
product in market.

Law of demand
The law of demand says that factors being constant, price and demanded quantity of
good and service and goods are related in inverse proportion with each other.
 As the product price rises, product’s demand will fall.
The law of demand gives explanation about consumer choice behavior when price
change.
Consumers buy less of a product if they find the price increasing and thus demand
for good subsides.
This is the natural behavior of consumer choice.
It occurs when a consumer realise that if a product is pricey and unnecessary, they
can do without it.
This is often referred to as a situation of decreasing marginal utility.