BMP4003 - Microeconomic Theory: Analyzing Trampoline Price Surge

This presentation reviews an article concerning the projected increase in trampoline prices due to rising shipping costs and port congestion, exacerbated by Brexit. It delves into the microeconomic theories underpinning these issues, focusing on the concepts of supply and demand, as well as cost and production. The analysis highlights how Brexit has impacted the demand and supply equilibrium, leading to increased costs of materials, labor, and shipping. The presentation concludes by emphasizing the importance of understanding microeconomic principles in navigating business challenges and adapting to changing market dynamics, particularly in the context of international trade and regulatory shifts. The document is available on Desklib, a platform offering study tools and solved assignments for students.

BUSINESS ENVIRONMENT

Table of content
 INTRODUCTION
 THE MAIN ARGUMENTS USING MICROECONOMIC TERMS/ CONCEPTS
 APPLYING THE ISSUES ON THE TWO FACTORS
 CONCLUSION
 REFERENCES

Introduction
 Business environment is a full collection of the factors whether it is external and internal
such as expectation, customers, stakeholders, industry trends etc.
 The economic concepts says that how should the customers should purchase in the business
market. The major key concepts related to economics are demand, costs and supply.
 The current presentation will be based on trampoline which is a game offered by the
company name outdoor toys.
 The study will provide detailed information about microeconomic theory and its aspects
 Furthermore, this presentation will highlight the two major theory applying on the given
issue in the study.

The main argument related to
microeconomic concepts
 As we all know that microeconomics is a very vast topic to understand and its concepts is
the overall study of what is likely to happen when people make choices in response to
changes in various elements such as prices, incentives and production technique.
 By understanding microeconomic concepts such as supply and demand, profits, monopoly
and incentives etc., any business owner will help themselves know about the world around
them.
 The major argument is the prices of the trampoline may be increase by the 40-50%in the
coming summer which has impacted the buying behaviour of people.
 The company’s owner James Owen predicted that they port congestion will be raised just
because of the brexit.

continued....
 Due to Brexit, many industries were impacted and responding
to drastic change.
 Whatever happens over the upcoming years or months, there
is an important need to know about the fact that how Brexit
will influence business.
 Every business is affected by Brexit due to the economic
affects and issues such as high price, workforce’s shortage,
financial services and many more.
 Just because of this a company outdoor toys have to face
issues related to prices of trampoline.
 They have to face more and more problems such as shortage
of container, high interest rate, high shipping costs.

Continued....
 The owner of outdoor toys James Owen, commented that due to high transport costs and
shipping cost of the games such as trampoline, swings and climbing frames will impact the
demand and supply, production cost and business profit.
 According to owner, the hauliers are also charging more in the UK which used to cost
almost £650 to haul a container from the Felixstowe port to the site of the firm in mid
Wales.
 Now, it is almost £1800 per container which can impact elasticity, production and costs
and profit of business.
 The purchasing capacity of customers will also get influences by this changing rules and
regulations

Applying the issues on the two main factors
 Due to Brexit, the demand and supply and costs and production of this game has been
impacted badly.
The two main factors are :
 Demand and supply
 Cost and production

Continued..
 In the study of economics, the relationship between the products' quantity that producers wish
to sell at different prices and the quantity that clients wish to purchase is known as supply and
demand.
 This price determination is usually used by the people in economic theory as the main and
important model.
 The relationship between demand and supply is an important factor which needs to be taken
into consideration.
 The law of demand says that at higher prices, purchasers will demand less of an economic
product.
 While the law of supply shows that at higher prices, sellers will supply more.

Continued...
 Cost and production- it means to all the costs of the goods or services that are included
when a company or any business offers a service.
 Cost and production of the game called trampoline also get influenced just of the big
decision named as Brexit.
 Due to this the company has to face issues in cost of material, labour cost, factory
maintenance and employee wages or salary.
 In addition to this, the firm also has to face problems in shipping costs also.
 Nowadays, customers are more concerned about the product cost and how the company is
managing the high price strategy. they are more attracted towards low cost so firm needs to
keep track on changing demand

Conclusion
 To conclude, understanding the concept of microeconomic the people need to understand
the most important concept such as labour, cost and price.
 It has been evaluated that the company in the UK have to face major issues due to
BREXIT which has also impacted the operations of business.
 The two major factors taken are demand and supply and also cost and production which
was greatly influence due to change on the rules and regulation in the UK.

References
 He, J. and e.al., 2021. Trampoline inspired stretchable triboelectric nanogenerators as
tactile sensors for epidermal electronics. Nano Energy. 81. p.105590.
 Wang, S. and et.al., 2019. Trajectory analysis for on-demand services: A survey focusing
on spatial-temporal demand and supply patterns. Transportation Research Part C:
Emerging Technologies. 108. pp.74-99.
 Pereira, M. M. and Frazzon, E. M., 2021. A data-driven approach to adaptive
synchronization of demand and supply in omni-channel retail supply chains. International
Journal of Information Management. 57. p.102165.