Microeconomic Report: Analyzing Brexit's Impact on Trampoline Demand

This report examines the impact of Brexit on the trampoline market through the lens of microeconomic principles. It delves into how factors like increased transportation costs affect pricing, customer demand, and investor confidence. The analysis incorporates the theories of demand and supply, illustrating how Brexit-induced price increases can lead to a decline in demand for trampolines. Furthermore, the report explores various market structures, including perfect competition, monopoly, monopolistic competition, and oligopoly, to understand how Brexit influences competition and market dynamics. Ultimately, the report concludes that Brexit has contributed to increased inflation, higher labor costs, and a decline in production activities within the UK economy, impacting the trampoline market and broader economic trends. Desklib offers a wealth of similar reports and study resources for students.

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Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Describing main arguments relating to the article by using the micro economic concepts.1
2. Explaining the theory of demand & supply and market structure......................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Economic concept deals with the basic understanding of the demand, supply, elasticity
and several market structure. In every economy there is a problem of allocation and utilisation of
resources because The significance of economics is that it helps in the price determination and its
stability,business decisions and also helpful for the government.This report contains the Brexit
issues which impact every sector of the economy(Bu, Tang and Wu 2019). It also includes the
study of detailed concept of micro economic concepts and related issues. Micro economic relates
to the economic activities of firms and household. The micro economic concept includes
demand, elasticity of demand, cost, revenue and different market structures.
MAIN BODY
1. Describing main arguments relating to the article by using the micro economic concepts.
The Micro economic factors that cab affect any business are as follows: -
The Impact of Customers: The customers are the backbone of the organization as they
support in major revenues of the organization. With the increase in price of the product it
is difficult for the customer the select the same brand or product they are purchasing
currently. In the given case as the transportation cost of the product increased it will
directly affect the final price of trampoline. Increase in price of the product reduce the
customer base. The Brexit exit will affect the customer of the UK as the demand of
trampoline starts declining(Hu, Song and Guo, 2019).
Availability of Investors: Shareholders and investors invest their funds in the company
in exchange of that they will receive return in the form of dividend. As the price of the
final product increase the margins of the business concern will start decline in the short
period of time and it will ultimately effect the origination operating results. Investors
share the risk in the origination therefore they are more concerned about the operating
results that will directly affect their wealth. The investor who are investing their funds in
UK companies also affected by Brexit existence.
Distribution Channels and Suppliers: Distributing channels plays a very important role
in positioning of goods. Sourcing the goods from various channels and distributing the
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same to consumer is the chain which an organization follows so that strong network cab
be built. The suppliers and distribution network plays vital role in the success of the
business concern. Brexit had made shortages hitting the UK economy badly compare to
rest of the world and affect the distribution system worse even before.
Level of Competition: The level of competition and market in which the organization
is functioning directly affects the organization and their market share. However, the large
number of customer also signifies the demand of the product is on high scale. If the
industry does not have enough competition than the organization will survive in the long
run as they do not build the business without regularly receiving feedback from the
customer and can’t modify their internal product quality management if there are no
competitors (Kochan and et.al., 2018) .
Availability of Employees: The business will drive smoothly when their workforce is
working for the benefit of the enterprise that is performing their role with full
effectiveness and efficiency. If the organization is working in the technical industry, then
they require specialized workers or employees who can easily handle that work. The exit
of Brexit also create lots of opportunities in the employment sector and demand of
workers will start increasing at the faster rate.
Media and the General Public: Media and general public are the face of company’s
product as they know the product better in terms of purchase and consumption (Misra and
et.al., 2021). The local communities also support the companies in building the brand
value as the entity pays taxes on regular basis, provides employment opportunity to
multiple groups and operate their business according to environment and fulfills social
responsibility.
2. Explaining the theory of demand & supply and market structure.
The article given above shows the effect of price rise in the trampoline, it can be
understood by studying the concept of main microeconomic concepts.
 Demand and supply - Demand refers to the consumer's need for a specific commodity.
In terms of economics, there is a difference between the demand and quantity demanded.
Demand refers to the wants of a consumer for a specific product whereas quantity
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demanded is the actaul quantity at a specific place and time. For instance, a person
buying 10 mangoes @ 5 per piece. In the law of demand, it states that there is an inverse
relationship between quantity demanded and price (Zhang and et.al.,2019). If there is a
rise in price On the other hand, supply refers to the total production done by the
manufactures for the consumers and avialable goods for the customers. The law of supply
states that at higher prices sell more of economic goods. In context of Brexit, the
european market has large share through which demand of the trampoline declines. In
general sense, the trampoline is a service offered to the children and youth age so if
prices of shipping cost declines the demand of the ride increases. On the other hand, if
shipping cost rises then there is a decline in the ride taken by the target market. There is a
positive realtionship between the demand and supply( Shadrina, 2018). If demand
incraeses, the manufacturers also has to incraese their level of supply. Hence, the change
in prices and other shipping costs impact the level of demand and supply.
 Market structure - It refers to the structure of market on the basis of degree of
competition, number of buyers and sellers, pricing strategies and exit and entry of various
buyers. The market is divided into four major markets-
1.) Perfect competition - In this type of market, the buyers manufacture homogenous products
and in this market the price is determined by the industry. The entry and exit of the buyers are
free. In this form of market, it is divided into long term and short term. In short term, there are
normal profit when average cost is equal to the average revenue, abnormal profit refers to the
sitaution when average revenue exceeds the average cost and there is also a situation of loss
when average cost is greater than average revenue. In long term, there is only normal profits.
2.) Monopoly market - This market deals with single buyers and large number of sellers. It
enjoys high revenue because a single seller takes all the benefits and capture a good market
share. There are barriers on entry and exit of the buyers beacuse govermnet is involved and large
people rely on the single resource provided by the monpoly market. In this market, there is scope
for price determination due to the different elasticities of the market. In short term, there are
abnormal profit, profit and losses. While in the long run, there are sitaution of abnormal profit
(Xu and et.al., 2018).
3.) Monopolistic competition - In this type of market, there are large number of buyers and
sellers which produce highly differentatited goods such as FMCG goods are example this type of
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market. There is huge selling cost involved in this type of market which is due to the same type
of goods (Tian, 2018). In case of short term, the buyer incurs normal profit, losses and abnormal
profit. In case of long run, it has normal profit and losses.
4.) Oligopolistic market - In this market, there are small number of suppliers because products
are unique and highely differentatited such as industry of cement and steel. There are restrictions
on entry and exit of the buyers. In case of oligopoly, there are high dependence among the
suppliers beacuse they create cartel and price is determined on the basis of the same. Kinked
demand curve is observed in this market structure which is due to the price rigidity.
CONCLUSION
From the above report, it can be concluded that analysing the microeconomic concepts
helps to study the trends of the economy and various factors of microeconomics. In context of
micro economics, the major impact is due to change in prices through demand and supply of the
specific market also flucuataes. The Brexit has incraesed the inflation rate, labour were available
at a higher rates and production activities in the economy also plummeted. By studying the
different market structure it helps to know the various segments of the services and production.
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REFERENCES
Books and Journals
Bu, H., Tang, W. and Wu, J., 2019. Time-varying comovement and changes of comovement
structure in the Chinese stock market: A causal network method. Economic
Modelling. 81.pp.181-204.
Hu, C., Song, M. and Guo, F., 2019. Intellectual structure of market orientation: A citation/co-
citation analysis. Marketing Intelligence & Planning.
Kochan, C.G.and et.al., 2018. Impact of cloud-based information sharing on hospital supply
chain performance: A system dynamics framework. International Journal of Production
Economics. 195. pp.168-185.
Misra, S., and et.al., 2021. Integration of Supply and Demand Side Management Using
Renewable Power Sources: Application on an Air Separation Plant. Industrial &
Engineering Chemistry Research.60(9).pp.3670-3686.
Shadrina, E., 2018. The Common Gas Market of the Eurasian Economic Union: Progress and
Prospects for Institutionalization. Region.7(1). pp.105-138.
Tian, H., 2018. Role of capital market to accelerate the transition to low-carbon energy system.
In Financing for low-carbon energy transition (pp. 211-238). Springer, Singapore.
Xu, Z.and et.al., 2018, July. Large-scale order dispatch in on-demand ride-hailing platforms: A
learning and planning approach. In Proceedings of the 24th ACM SIGKDD
International Conference on Knowledge Discovery & Data Mining (pp. 905-913).
Zhang, H and et.al.,2019. Optimal design and operation for supply chain system of multi-state
natural gas under uncertainties of demand and purchase price. Computers & Industrial
Engineering.131. pp.115-130.
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