Impact of Microeconomic Principles on Trampoline Business Profit

This report examines the microeconomic factors influencing the trampoline business, focusing on demand and supply dynamics and their impact on profitability. It highlights the challenges posed by increased shipping costs and their effects on toy retailers, particularly those dealing with large items like trampolines. The report delves into microeconomic concepts such as demand and supply, discussing factors like goods prices, consumer income, and customer preferences that affect trampoline demand. It also explores the law of supply, emphasizing the importance of efficient supply chains and the influence of production costs, government subsidies, and technology. Furthermore, the report addresses elasticity theory, explaining how changes in demand and supply elasticity can impact the trampoline market. The analysis concludes that businesses should strategically plan changes in product pricing and supply to maintain profitability, and it underscores the significant role of microeconomic factors in the trampoline business's success.

Business
Environment

INTRODUCTION
• Economics referred to the evaluation of resources which are required for producing the services
that can full fill the targeted market demands.
• Economics identifies the scarcity of such resources and evaluate that the demand and supply of
such products are occurring in a flow. There may occur a variety in the complex issues which occur
within the large size markets.
• Microeconomics and macroeconomics are the two aspects of economy, which make sure that the
employees of the organisations are working effectively for targeted marketplace (Draper, Clement
and Alexander, 2020).

PROFIT ISSUES WITH TRAMPOLINE
• The reason were linked with increased cost of shipping of trampoline globally,
which was referred by a game retailer of a small business in market.
• George Godman, the owner of respective organisation operating a toy retailing
business referred that the transportation cost in large size toys are increasing.
• The trampoline and climbing frames like large toys cost high transportation rate.
The majority of toys retailers of UK confirmed a huge kind of lose from market
which is responsible for having impact over the profit of the toy industries.

MICROECONOMICS CONCEPT
• Microeconomics is the study of certain factors which have effect over
the outcomes of business plan.
• It analyse the outcomes of individual's choices in context with certain
changes related with prices, resources, production methods etc.
• Microeconomic subgroup consist of seller, buyer and owners of
enterprises.
• The business of an organisation is dependent on the demand of its
products (Augier and Francois, 2019). Higher the demand of the
product, higher will be the profit of organisation and vice versa.

DIFFERENT THEORIES IN CONTEXT WITH
TRAMPOLINE
• Demand and supply:
• Demand is defined as the choices that an individual makes regarding
the need of the product, that is weather he want to purchase the
particular product or not.
• One of the many articles on trampoline suggested that the demand for
Chinese items are increasing worldwide and the market is analysing
the shipping capacity for estimation of the provided situation
(Hansen, 2019) (Grenestam, 2019).
• The law of demand: The law of demand suggest the indirect
relationship in between the price and quantity of good in the desired
marketplace.

FACTORS RESPONSIBLE FOR INFLUENCING
THE DEMAND OF TRAMPOLINE ARE:
• Goods price: Customers purchase the good and services which are
affordable to them
• Consumer's income: The purchasing of the product or services is connected
with the income of consumer.
• Price of the product: Goods are categorised into two categories, substitute
goods and complementary goods.
• Customer's preferences: Such aspect include the preferences of purchaser
that is identification of needs and choices of desired marketed segments

LAW OF SUPPLY
• The law of supply is originated from large market place which states
that the supply contributes significantly in the price of goods as well as
to achieve considerable amount of profit.
• The on time and efficient supply of goods and services creates good
image of the business organisation (Wessels, 2018).
• The increase prices of goods is responsible for overall good supply
within the market.

FACTORS AFFECTING THE SUPPLY OF GOODS
ARE
• Cost of production: When the organisation is having sufficient
amounts of raw material and other required utilities for production
then there will be an enhanced supply of the products.
• Subsidies of government: The payments offered by local or national
authorities have positive effect over the supply of goods and services
• Technology state: The new technologies are responsible for
generating a good amount of revenue from the products as the
incorporation of technologies within the system reduces the time limit
and efforts.

ELASTICITY THEORY
• Elasticity is the measure of economy for sellers and
distributors. Elasticity shows the level of products the
consumer consumes when the prices of product undergo
changes
• Elasticity in demand: It refers to the changes occurring
within the demand of products due to changes in the need
and preferences of people.
• Elasticity of supply: Elasticity of supply is the measure of
responsiveness in the supply of products when the market
price has changed

FACTORS RESPONSIBLE FOR AFFECTING
ELASTICITY ARE
• Substitute's availability: If more substitutes are present then the demand of elasticity will be
more.
• Necessities: The products which are essential for survival are referred as necessary products,
their hike price may not produce any effect over their consumption

CONCLUSION
• The overall presentation concludes that the organisation should plan their strategy before implementing any
kind of change within their products and their prices.
• In context with the trampoline the presentation concludes that the hike on the price of trampoline have effect
over the supply as well as on the profit of organisation.
• Microeconomics enclosed of two wheels, demand and supply which ensure the good flow of products within
the market and an appropriate profit to the organisation by increasing the supply and demand of trampoline in
market.
• The elasticity withhold the effects that the microeconomic factors can hold over the trampoline's marketing.
Microeconomic factors which have influence over the trampoline's marketing involve commodity prices,
consumer's preferences and their income.

REFERENCES
Aspromourgos, T., 2019. What is supply-and-demand? The Marshallian cross versus classical economics. Review of Political
Economy, 31(1), pp.26-41.
Augier, P. and Francois, C., 2019. The Digital Economy in Mediterranean Countries: Socioeconomic Challenges and
Convergence Potential. IEMed: Mediterranean yearbook, (2019), pp.96-104.
Brown, O.H., Mullineaux, D.R. and Mulloy, F., 2021. Dynamic testing to determine and predict trampoline function. Sports
Engineering, 24(1), pp.1-10.
Corvellec, H., Stowell, A.F. and Johansson, N., 2022. Critiques of the circular economy. Journal of Industrial Ecology, 26(2),
pp.421-432.
Draper, N., Clement, T. and Alexander, K., 2020. Physiological demands of trampolining at different intensities. Research
Quarterly for Exercise and Sport, 91(1), pp.136-141.