Impact of Soaring Shipping Costs on Trampoline Producers: A Microeconomic Analysis

BUSINESS ENVIRONMENT

INTRODUCTION
•Business environment refers to the aspects which affects business operations in many
ways and also affects effectiveness, profitability and risk aspects too.
•In the report a case study is taken in which due to higher shipping costs the producers
of Trampoline a type of big toy are facing problems.
•In the report on the basis of the taken case study main arguments which are raised
would be discussed, using microeconomic terms and concepts.
•At the end of the report taking demand and supply theory and elasticity theory of
economics the issues would be deciphered.

MAIN ARGUMENTS OF THE ARTICLE
The cost of shipping are soared so are likely to cause a bounce in the cost of trampolines.
•Microeconomic concept of demand and supply refers that if the demand of some product or
service is high then will cause the prices up.
•Due to high demand of ships services are hiked so as per the law of demand causing shortage
of the services.
•As per the argument the demand of Chinese products is getting higher which causes shortage
of shipping services.
•Since the retailer is engaged in big toys business and having need of such transportation
system so can fulfil his business requirements.

Continued......
The raising cost of transportation would cause cost of trampolines in the UK.
•As the microeconomic concept of Scarcity articulates if a service of product is not available in
access then the cost will be surging.
•In the case where shipping services are experiencing hike in term of their demand in the market.
•Which would ultimately cause their prices higher and that's the reason behind hiking cost.
•The row material cost and services cost are directly related to the price determination of the
organization.
•The final cost is nothing but accumulation of various direct and indirect costs which are
occurred while going through the process of production.