BMP4003 Business Environment: Economic Concepts in Trampoline Market

This case study examines the trampoline market through the lens of economic principles, focusing on demand and supply dynamics. It highlights the impact of rising shipping costs on trampoline prices and the subsequent effects on demand and profitability for retailers. The analysis covers key economic concepts such as demand, factors affecting demand (price, income, related goods, consumer preferences), and demand elasticity. It also explores supply, factors influencing supply (production costs, government subsidies, technology), and supply elasticity. The study concludes that increasing trampoline prices affect overall supply and profitability, emphasizing the interplay of demand and supply in shaping market outcomes. Desklib offers a wealth of resources including similar solved assignments and past papers for students.

BMP4003 Business
Environment

Article Review - Economic Concepts
And Models
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Table of contents
• Introduction
• Trampoline's profit Issues
• Concept of Demand
• Factors Affecting Demand
• Demand Elasticity
• Concept of Supply
• Factors Affecting Supply
• Supply Elasticity
• Conclusion
• References

Introduction
Business environment is the total sum of all the
factors which are external to the business firms
and also impacting the overall functionality of
the business. Competitors, government,
customers, suppliers and cultural, legal and
technological aspects. These conditions comes
under the study of economics. Moreover,
demand and supply are the two wheels that are
taking the market to the heights and also
contributing to profitability.

Trampoline's profit Issues
• According to BBC News, the shipping cost is soaring
and due to which the overall cost of trampoline is
rising and this is being known by one of the game
retailer. One of the outdoor toy owner, Owen says that
there is significant change in the transportation cost &
port congestion can be high for the large size toys and
these are climbing frames, trampolines becoming more
expensive by which people are not abler to buy the
trampoline. Toy retailer is facing huge fluctuation in
the overall revenue and profits.

Concept of Demand
Demand is the desire of the individual to
purchase the goods and services backed
with sufficient purchasing power to buy
the particular commodity and other
factors remains constant. There is
inverse relationship between the prices
and the quantity demand of goods and
services as when the prices of given
goods increases then the demand of
given goods downfalls and vice-versa.

Factors Affecting Demand
• Price of the commodity:
• Income of the consumer:
• Price of related goods:
• Taste and preferences of the
customers:

Demand Elasticity
This is also called as the change in
demand curve refers to the shift in the
entire demand curve can be to the right
or left and this is being change in the
certain factor such as change in
income, prices of goods, taste and
preferences of buyer.

Concept of Supply
Supply refers to the fundamental factor
which explains that total available
amount for the particular products to its
buyer. This also related to the amount
available at the given prices by which
they can ensure higher profitability in
the large market.

Factors Affecting Supply
 Costs of production:
 Government Subsidies:
 Technology:

Supply Elasticity
This is being defined as the shift
in the supply curve as the change
in the various factors that includes
the cost of production,
government subsidies, technology
and objectives of firms. When the
supply of trampoline increases
then the supply curve will shift
from s0 to s1.

Conclusion
From the above presentation, it is concluded that the increasing prices of
trampolines impacting the overall supply and its profitability. There are two
concepts demand and supply, elasticity of demand and supply which is reflecting
the overall market scenario. There are certain aspects which is impacting the overall
demand and supply of given goods that are price of commodity, income of the
buyer and its expectations.