Impact of Microeconomics on Trampoline Business: A Demand-Supply Study

This report examines the business environment concerning trampoline profitability, focusing on microeconomic principles such as demand and supply. It addresses the issues related to trampoline pricing, influenced by shipping costs, and delves into the concepts of microeconomics, defining demand as a consumer's inclination to purchase, supported by purchasing power. The report further explains the law of demand, highlighting the inverse relationship between price and quantity demanded, and explores factors affecting demand, including consumer income and preferences. Elasticity in demand, supply, and the law of supply, which correlates commodity prices with supply in a competitive market, are also discussed. Factors affecting supply, such as production costs, government subsidies, and technological changes, are analyzed, culminating in a conclusion that rising trampoline prices impact overall revenue, emphasizing the importance of understanding demand and supply principles. Desklib offers similar solved assignments for students.

Business Environment

Table of content
• Introduction
• Trampoline profit issues
• Concept of microeconomics
• DEMAND
• Law of demand
• Factors which does affect the demand
• Elasticity in demand
• Supply
• Law of supply
• Factors affecting supply
• Change in supply
• Conclusion
• References

INTRODUCTION
Business environment refers to the study of all
external and internal elements that assist
company management and have a significant
impact on management's international
operations. There are a variety of competitors,
including the government, consumers, suppliers,
and some conventional characteristics.

Trampoline's profit Issues
This was stated in a recent storey in a well-
known newspaper about the frequent changes in
the cost and price of the trampoline, and the
reason for the high pricing of the trampoline is
due to the high shipping costs, as analysed by
retailers who deal in the UK market.

Concepts in Microeconomics
Microeconomics is the study of how
individuals, households, and people behave
while making decisions and allocating
resources appropriately.

DEMAND
It is a term that describes a user's proclivity to
purchase a given product or service, supported
by the purchasing power to do so. The
components are all the same.

Law of Demand
It is the law that states that when a certain
amount of a good is purchased, the quantity
purchased varies with the price and that the two
are inversely associated; in other words, the
higher the price, the lower the demand, and the
lower the price, the higher the demand.

Factors which does affect the demand
• Price of the commodity
• Income of the consumer
• Taste an preferences of the customers

Elasticity in Demand
It is also known as the changes in demand
graph, which determines the displacement in
the global demand curve to the right or left,
depending on specific criteria such as changes
in financial gain, commodity cost, and buyer
preference.

Supply
It is a term that can be defined as the quantity of
money available to customers for specific items
and services. This has a lot to do with the total
amount of commodities that are now available at a
given price, as well as the company's potential to
generate new and fresh earnings.

Law of supply
It is a fundamental theoretical notion that has a direct
relationship with the amount of supply and the
commodity prices in a competitive market. Because all of
the components are the same, when the price of a given
commodity rises, the supply of specific goods decreases.

Factors affecting supply
• Costs of production
• Government subsidies
• Technology