BMP4003 Business Environment: Article Review - Economic Concepts

This report provides an analysis of economic concepts within a business environment, focusing on the impact of demand, supply, and elasticity on a company's profitability. Using the example of rising trampoline prices due to increased shipping costs, the report explores microeconomic principles and how they affect business operations. It examines the law of demand and supply, highlighting factors influencing both, and discusses elasticity in relation to price changes and consumer behavior. The report concludes that understanding these economic concepts is vital for businesses to navigate market dynamics and maintain profitability. Desklib provides a platform for students to access similar solved assignments and past papers for further study.

BMP4003 Business Environment
Assessment 1 - Individual Presentation

Article Review - Economic Concepts And
Models
Name:
ID:

Contents
• Introduction
• Arguments using Micro economic concepts
• Demand and Supply
• Elasticity
• Conclusion
• References

INTRODUCTION
The word business environment is the group of two factors that is the internal and external.
The examples of such factors are customer's wants, suppliers, government rules, legal rules,
technological innovation, market and economic trends, employees etc. All these factors
affects the operational workings of the company. The above mentioned factors control the
conditions of a business enterprise. . In the following report, it is explained that how
demand and supply of the goods plays a vital role in uplifting the profitability in an
economy. This report also encompasses the effect of demand due to the rise in prices for
Trampoline.

Arguments using Macroeconomic Concepts
• Microeconomics
It is the branch of science which deals with the
study of individual consumer, households and
company's behaviour in determination and allocation
of resources. Basically microeconomics deals in micro
concept and its main focus on to identify individual
needs and wants. For example: consumer equilibrium
and saving and incomes of individuals.

Profit problems of Trampoline
As per the news of BBC, there is an increase in the shipping costs which is leading to the
rise in the cost of Trampoline. This is what about which the game retailer has an idea. In
line with Owen, who is the owner of outdoor toy states that there is a utmost increase in the
shipping cost. It is also stated that there is a problem of loading and unloading, as the
terminal is full. This will result in high port congestion for large-scale toys. There is a
fluctuation on the sales and profit level of the business.

Demand and Supply
• Law of demand- It implies that there is an
inverse relationship between the price and
the quantity demanded for the products.
Some of the features can be compared in
the market and also have a specific
approach. The number of factors that affects
the demand of trampoline are noted below-

Factors affecting demand
• Price Of the commodity
• Income of the consumer
• Price of related goods
• Taste and preferences of the
consumer

Supply
It means that the product which are ready to supply in the market through supplier of the product or
it can be say that supplier of the product or goods are ready to supply their product in big market and
earn profit for same. But it can sell their product if price of the product increases then in that case
supply more and if price of the product decreases then the supply less in the market.
Law of Supply: It means that the price of the product and supply of the product having positive
relationship with each other. Basically in the concept of law and supply all the factors remain
constant when the price of the commodity increases and the supply of the product also increases
because the supplier sell more in that situation but if the price decreases then the supply of goods
also decreases and supply less in the market.

Continue..
From the above figure shows that the
positive relationship between the prices
and its supply the above curve is
downward sloping curve it shows that
the every price trampoline increases due
to which the quantity supply of the
trampoline also increases.

Factor that affect the supply of
the particular commodity
• Cost of manufacturing
• Natural conditions
• Modernization of technology

Elasticity
It means demand for a commodity changes due to changes with the factors of production it
is also called as elasticity of demand. Basically in elasticity of demand if demand for a
goods changes due to this factors of production and it includes:
• Taste and preference of a customer
• Income of customer increases
• Price of product