Business Environment & Diamond Market: A Microeconomic Analysis Report

This report analyzes the business environment and microeconomic concepts within the diamond market. It explores the impact of internal and external factors, focusing on microeconomic principles such as production levels, demand and supply dynamics, and market structures (perfect competition, monopoly). The report highlights the influence of factors like sustainability concerns among Millennials and Gen-Z on diamond demand, and the impact of events like the COVID-19 pandemic on overall demand and production levels. It concludes by emphasizing the importance of understanding both controllable and uncontrollable factors in the business environment, and the need for businesses to adapt to challenges like maintaining sustainability and reducing carbon emissions. Desklib provides access to this and many other solved assignments.

Business
environment

TABLE OF CONTENT
 Introduction
 Explaining the microeconomic concepts used in the case study related to diamond
 Concept of demand &supply and market structure
 Conclusion
 References

INTRODUCTION
 Business environment is the aggregate of
internal and external factors of
environment.
 These factors impact the business directly
or indirectly to various organisations.
 The internal factors include the
organisational policies, mission and
human resource.
 On the other hand, external environment
comprises those factors which cannot be
controlled by the business (Bigerna,
2018).

Explaining the microeconomic concepts used
in the case study related to diamond
 Microeconomic concepts: These are
related to individual concepts which
affect the decision making process.
 The scope of microeconomics is very
wide.
 It includes the concepts related to
Demand, supply, cost, revenue and
production.
 There are certain factors such as
global health pandemic, Covid19. It
hit each sector of the economy. In the
above given case study, there was a
choice between the laboratory and
mined diamonds.

CONTINUE
 There is an explanation of microeconomic
concepts which are raised in the above case
study are explained as given below:
 Production level: It is an activity which
converts the inputs into outputs. There are
various factors of products such as land,
labour and capital which contributes in the
production activities.
 Demand and factors that leads shift in the
demand: in economics, demand is described
as the quantity of the goods which consumer
are willing to buy.

Concept of demand &supply and market
structure
 Demand and supply: while studying the
microeconomic concepts, the demand is
the foremost concept which is required to
be understood.
 There is a law of demand which states
that there is an inverse relationship
between the price and quantity
demanded.
 In the case study, it shows that
Millennials and Gen-z are more concern
about the sustainability which impacts the
demand of the diamond(Hoogstra-Klein
and Meijboom, 2021).

CONTINUE
 Market structure:
 In economics, on the basis of number of
buyers and sellers, degree of competition
and pricing strategies. The markets can be
differentiated. There are different markets
such as perfect competition, monopoly
market, monopolistic market and
oligopoly market. The different
marketing structures exist in every
economy can be elaborated as given
below:
 Perfect competition: In this form of
market, there are large number of
buyers and seller.

CONTINUE
 Monopoly market: In monopoly market,
there are single seller and large number of
buyer.
 In this form of market, there is no
existence of competition because there is
unavailability of the substitutes(Li, Feng
and Luo, 2019)
 The buyers are price makers and there is
restriction on the entry and exit of the
firm.
 The monopoly can be obtained due to
various reasons such as limited resources
or opportunity oh having unique raw
material and government license for a
specific industry to be operated.

CONCLUSION
 From the above report, it can be concluded that business environment is impacted by
various factors which can either be controlled or uncontrolled.
 The factors which are not under the control are external factors.
 One of the factor which recently interrupted the business process is covid19, it declines the
overall demand and there was fall in the prices as well.
 The overall production in the economy declines and declines the level of output as well.
 Even there is reduction in the employment level which affects the macroeconomic factors
too. The above case study states that there were issue of maintaining the sustainability and
decline the emission of carbon to zero level.

REFERENCES
 Bigerna, S., 2018. Estimating temperature effects on the Italian electricity market. Energy
policy, 118, pp.257-269.
 Hartmann, J. and Klein, H.G., 2020. Supply and demand for plasma‐derived medicinal
products–a critical re‐assessment amidst the COVID‐19 pandemic. Transfusion.
 He, S., and et.al.,2019. Assessing and mapping cultural ecosystem services supply, demand
and flow of farmlands in the Hangzhou metropolitan area, China. Science of the Total
Environment, 692, pp.756-768.
 Hoogstra-Klein, M.A. and Meijboom, K., 2021. A qualitative exploration of the wood
product supply chain–investigating the possibilities and desirability of an increased demand
orientation. Forest Policy and Economics, 133, p.102606.
 Li, C., Feng, L. and Luo, S., 2019. Strategic introduction of an online recycling channel in
the reverse supply chain with a random demand. Journal of Cleaner Production, 236,
p.117683.