16871 Business Environment: Demand, Supply and Trampoline Profits

This report examines the business environment factors affecting Trampoline's profitability, focusing on the principles of supply and demand. It highlights that increased shipping costs are raising the overall cost of trampolines, impacting demand. The report defines demand and supply, detailing the inverse relationship between price and quantity demanded, and the direct relationship between price and quantity supplied. Factors influencing both demand (price, income, related goods, consumer preferences) and supply (price, related goods, production costs) are discussed. The concept of elasticity in both demand and supply is explored, explaining how changes in various factors can shift the demand and supply curves. The report concludes by emphasizing the importance of understanding demand and supply for microeconomic analysis.

16871 Business Environment

Table of Content
Introduction
Trampoline’s profit issues
Concept of Supply
Concept of Demand
Elasticity

Introduction
Business environment is the collection of several
internal as well as external factors which affect the
operations of a business organisation. Some factors of
business environment include employees, supply and
demand, innovation in technology, economic changes,
market trends, management, demand of customers and
many more.

Trampoline's profit issues
As per the BBC news, raise in shipping cost result in the
overall raise in cost of trampoline which is found as
one of the game retailer. A outdoor toy owner state
that continuous changes in the cost of transportation
and port congestion are found as high for the large
size toys.

Demand
Demand is defined as a principle of economic which
state the wishes or desires of an individual to buy the
products and services and willingness for paying a
particular amount for a specified product or service
(Ilk and et. al., 2021).

Law of Demand
This law present the inverse connection
among the prices and quantity of a
particular product or service. This law
is suitable only in the cases when
other factors remain constant. Below
mentioned are the several factors
which are impacting the demand of
Trampoline:

Factors impacting demand
Price of commodity
Income of customers
Prices of related goods
Taste and preferences of customers

Elasticity in Demand
Elasticity in demand refers to
the change or modification in
the demand curve. It result in
the shifting of entire demand
curve to the left or right side
because of change in some
factors such as prices of
goods, taste and preferences
of customers, income of
buyers and many more.

Supply
Above mentioned diagram state that the demand curve
shift to d1 from d0. It shows the decrement in the
demand because of high prices of trampoline.
Reduction in the prices of trampoline can increase its
demand which result in the shifting of demand curve
to d2 from d0.

Law of Supply
This law of economic state that
positive relationship of prices
and quantity supply of a
particular product and service.
According to this law, supply of
quantity of a particular product is
directly related to the prices of
products as it increases when the
prices increases and vice versa

Factors impacting supply
Price of commodity
Prices of related goods
Prices of factors of production

Elasticity of Supply
It defines the changes or
modifications in the supply curve.
Basically it shows the shifting of
supply curve to the left or right side
due to the modifications in some
factors which include cost of
production, prices of other goods,
prices of given commodity and
many more (Cheng, Fong and Law
2021).