Economic Theory of Consumer Behaviour - Report

Added on -2020-02-24

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Economics for Business 1Economics for Business
Economics for Business 2Table of ContentsIntroduction................................................................................................................................3Business Economics...................................................................................................................4Economic theory of consumer behaviour- Utility..................................................................5Australian Economy...................................................................................................................5Australian Renewable Energy Agency (ARENA)....................................................................6Clean Energy Finance Corporation (CEFC)..............................................................................7Electricity generation from renewable sources in Australia......................................................7Australian energy regulator........................................................................................................8Fiscal Decentralization and Australian economy.......................................................................8Projects under Construction.......................................................................................................9Projects with financial commitment.........................................................................................10Criticisms of RET....................................................................................................................11Conclusion................................................................................................................................12References................................................................................................................................13
Economics for Business 3IntroductionThis report revolves around the Australian renewable energy. Renewable energy in Australiameans Australia is making efforts to expand its renewable energy. This report is about a tenyear plan by Australia for 100 per cent renewable energy. A renewable energy target hasalready been set by the Australian economy that is around 33000 GWh by 2020. So nowAustralia is working hard to achieve this target (BusinessFocus, 2017). Australia is havingsome of the best renewable energy resources that can help it out in achieving this target.Australia is also promoting the small renewable energy sources like roof top solar plant. If wetalk about business economics then for a business everything is economics because in abusiness we have to take decisions from time to time. The success of business depends uponthe capability of business to take right decisions or to make the best choice among all thealternatives available. Business economics is a combination of economics and businessadministration.There are different boards that are formed by Australian government to compete with thistarget. These committees include Australian renewable energy agency (ARENA), CleanEnergy Finance Corporation (CEFC), Australian Energy Regulator (AER), Australian energystatistics etc. and this report also explains many projects that were pre-planned by Australiawhich are related to this renewable energy target. Some of the projects were completed butsome are still pending because of higher cost. This report also includes how the fiscaldecentralization affects the growth of the economy. When this renewable energy target wasset then it was around 41000 GWh by 2020 but in 2015 this target was revised. This reportexplains the contribution of coal, hydro-electric power, wind power solar power , wavepower, nuclear power, geothermal and biomass in the country’s total electricity production(Robinson, Nguyen and Wang, 2017).
Economics for Business 4Business EconomicsBusiness economics means applying economic theory to business. Business involvesdecision-making. Decision-making means selection of best alternative among all thealternatives available. The decision of choice occurs because resources are limited in aneconomy. Economics for business includes four major decisions. First decision is demandanalysis and forecast. It means the business is transforming the raw material into consumablegoods. So for this a proper estimate of demand is required (MacroBusiness, 2017). Thebusiness needs to properly forecast about the future demand then the make the quantity ofgoods to avoid wastage. This decision requires a proper understanding of consumer’s tastesand preferences. The second major decision is about cost and production analysis. This is amost critical decision and the decision of pricing and profit depends upon this. The businessis required to analyse in advance the total budget required for the production. Production ofgoods can only be possible if there is profit margin in the produced goods. Next decision is about pricing. The business is required to price its goods in such a way that itis not too high and not too low. Sometimes the selling of a product is based on its pricing.Consumer buys goods according to their prices. Goods other than basic needs can only bebought by consumers on the basis of two factors i.e. price and quality. The fourth decision isrelated to profit management. The main objective of each and every business organization isprofit. Profit depends upon the cost of the product. If the cost to the company is higher then itwill earn less profit and if they produce goods at lower cost then there is a chance of higherprofit margin (Pandya and Sisombat, 2017).

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