Economic Concepts and Trampoline Prices: A UK Market Analysis Essay

This essay examines the rising prices of trampolines in the UK market through the lens of microeconomic theory. It begins by outlining the arguments surrounding the increase in trampoline prices, particularly focusing on the perspectives of suppliers like Outdoor Toys, who attribute the rise to increased transportation costs and port congestion post-Brexit. The analysis applies the Law of Demand and Supply, explaining how increased shipping costs and inflation affect the price of trampolines. Furthermore, the essay explores the concept of price elasticity of demand, classifying the demand for trampolines as relatively elastic due to the significant price changes affecting quantity demanded. It concludes by summarizing the impact of transportation costs on suppliers and consumers, emphasizing the role of microeconomics in understanding market dynamics. Desklib provides access to this essay along with numerous other solved assignments and past papers.

Economic concepts and
models

Table of Contents
 Introduction
 Arguments on soaring of Trampoline prices in UK
 Application of theories on the issues of trampoline
supplies
 Conclusion
 References

Introduction
 Economic models refer to the tools used by
economists to describe reality or to make predictions
about future, for economic issues.
 Microeconomics is the study of the behavior of
individuals, firms and households, making decisions
with respect to allocation of scarce resources.

Microeconomic Theory
 The study of microeconomics focuses on markets,
industries and sectors individually.
 Its goal is to analyze the market mechanisms with
respect to relative prices among goods or services.
 It helps to allocate the scarce resources, having
alternative uses, in their best manner.

Arguments on soaring of Trampoline prices
in UK
 As per the article, the prices of trampoline and some other
toys are tend to increase in the summer in UK.
 Owner of Outdoor Toys, James Owen is of the opinion that
the rise in the transportation costs and port congestion will
lead to an increase in the prices of larger swings such as
trampolines.
 This will push the suppliers to supply products at prices
higher than usual.

Application of theories on the issues of
trampoline supplies
 Economics is based on various theories which help in
solving the issues related with economy.
 These theories help to identify the problems.
 The main issue here refers to the occurrence of problems in
supply chain of trampoline due to rise in prices.
 Application of two theories in context with rise in prices of
trampoline are discussed below:

Law of Demand and Supply Theory
 This theory deals with the relationship of demand and supply
between the seller and the buyer.
 Commodity and price for the same are the two aspects of this
theory which are inter related.
 The theory states, other things remaining equal, when price of a
commodity increases demand for that commodity decreases and
when the price decreases, demand for that commodity increases.
 This is the Law of Demand and Supply.

Continue…
 In the scenario, there is an enhancement in the shipping costs
post Brexit.
 In addition to this, hauliers also increased their costs due to
inflation. These factors directly affects the price of the
product, trampoline.
 Furthermore, the market lack resources with the
manufacturers in China make the condition even worse.

Elasticity
 It is the theory of economics used to measure the percentage
change in one variable, say price to the percentage change in
other variable, say demand for the commodity.
 It shows the degree of responsiveness of change in price of
the commodity to change in quantity demanded for that
commodity.

Continue…
 There are different types of price elasticity of demand which is
explained below:
o Relatively Elastic Demand
o Relatively Inelastic Demand
o Unitary Elastic Demand
o Perfectly Elastic Demand
o Perfectly Inelastic Demand

Continue…
 In the present case, there is a slight change in the quantity
demanded for trampoline with a huge change in its price. Thus,
the demand for trampoline is relatively elastic in nature.
 Furthermore, there are various other factors also which affects
the price of trampoline such as transportation costs.
Transportation costs are enhanced which means that there is an
increase in the cost of moving goods from one place to another.

Conclusion
 From the above presentation, it is concluded that
microeconomics is the study of individuals, households and
firms. It helps to allocate the scarce resources in an
appropriate manner. Reasons for the changes in prices of
trampoline are being studied in the presentation. Increase in
transportation costs enhance the costs for the suppliers, the
burden of which falls, ultimately, on consumers.