BMP4003 Business Environment: Economic Concepts & Models Review

This presentation reviews an article discussing the increase in trampoline prices due to rising shipping costs. It explains microeconomic concepts such as market structure (perfect competition, monopolistic, oligopoly, and monopoly), and elasticity of demand and supply. The review highlights how increased transportation costs impact the demand and supply of trampolines, influencing the market dynamics. The article concludes that the company operates in a monopolistic market, navigating the challenges of differentiated goods and fluctuating prices. Desklib offers similar solved assignments for students.

Article Review –
Economic Concepts
and Models

INTRODUCTION
Economics is the study of the scarcity and the implications of the available resources,
manufacturing of goods and services, their growth and welfare over a time. There are great
variety of complex issues are emerging which are having the main consideration in the
marketplace. Demand and supply are the two wheels of economics which drive the whole market
and ensures the flow of goods and services in the target marketplace. This presentation is based
on the given article which explains the increases in the prices of trampoline due to the during
prices in the shipping cost of the trampolines. As after the huge impact of Brexit, there is huge
cost to transport and port congestions. This assignment will cover the explanation of the
microeconomics concept, market structure and the elasticity and also cover the supply for the
given piece of work and also understand the problem of increase in the given prices of
trampolines.
MAIN BODY
Trampoline's profit Issues
According to the BBC News, this is based on increasing shipping cost & port
congestions within the United Kingdom. One of the game retailer whose name is James Owen,
operating its business with out of the toy retailer company, Outdoor Toys, increasing prices of the
trampoline is hurdle the overall market of the trampoline due to rise in the shipping cost which is
rises by 40-50% on the big size toys that are trampoline and climbing frames so this reducing the
overall supply of trampoline in the market. As, there are various retailer who are operating in toy
industry and manufacturing in Chine but they are not getting such space out of it due to the heave
duty of export of goods in other countries by which they are facing issue in generating more
profitability and revenue. Increase in the freight cost for the first time due to the big size of the
trampoline which they need to shipped their goods outside the country.
Concepts in Microeconomics
It is the study that what is likely to happen as the individuals make the choice in context
to the change in incentives, resources, prices and the certain methods of productions. It also
incudes the buyer, sellers and owner of the business. There are various change in relation to the
fiscal and monetary policy that is being controlled by the government authorities so that they can
maintain the flow of goods in the economy.

Market structure
It is the part of the microeconomics and define the various market structure and these
market structure is based in the certain number of seller and buyer, type of goods, exist and the
entry in the large market so that they can sustain in the competitive market with the nature of
goods and services and the economic scale in the target market. Following are the certain market
structure that are illustrated below:
1. Perfect competition: the marketplace in which large number of buyer and seller are
existing and offering the high competition against each other as there are more in number
which can compete to each other to sustain in the market. All the prices of the given
goods are being fixed by analysing the prices of the other firms who are competing in the
market. Customer are stick to the prices of the goods as they always finds the goods
which are affordable to them in comparison to its substitute goods which are being sell in
the large market. When the given prices of the goods is being managed by one itself as
these are the type of firms who are operating and offering homogeneous goods that are
identical in nature and firms do not have restrictions to entry and exist of the market
structure.
2. Monopolistic market: this is the type of market that is basically consist of the various
differentiated goods that are not same in the identity but some how they are being
differentiated from each other. There are large number of buyer and seller who are
operating business in the market with its huge demand of goods so the seller have to full-
fill the demand for the same in the large market. It is vital for the company to have the
appropriate to check the prices of the goods which are being offered by the other firms so
that they can retain in the market with the aim of having higher profitability and revenue.
For instance, Outdoor Toys is conducting its business in monopolistic market in which
the shipping cost of the trampoline is increasing as they are considered due to the rise I
the shipping cost of the trampoline in the large market.
3. Oligopoly market: It is the type of market in which few big are operating its business
and this is being stated that the firms are having the dominance on all its customers. As
the quantity of consumer are less than the quantity of sellers by which they have their
own margins for the higher level of revenue as they expect with their unity. As the

consumer act as the price takes and the companies are the price makes. Any new entrants
have the certain restrictions in the exist and the entry of the firms in the large market.
4. Monopoly market: As the competitors are explaining that there are single seller who are
operating its business in the target market and they are having all the power to change the
given prices of the goods as per their choices but the buyer have no choice as they need to
stick in the market and have the purchase the goods which are not affordable to them
because these are purchasing in the monopoly market in which they don't have choice to
sustain in the marketplace. They do not bargain for the given prices which is being fixed
by the seller. The seller also has no substitute so they have to analyse the ownership,
costs, licences and copyrights.
Elasticity
It is the part of microeconomics which explains the change in the demand and supply of
commodities and services. Basically there are two parts of elasticity which are illustrate below:
 Elasticity of demand: This basically explains the change in the prices of the goods make
impact in the demand of goods and the demand curve will shift to the left or right. When
the prices of goods and services tends to rise then the demand for the same decreases and
the demand curve will shift to the left in the market. It is due to the change in the various
factors that are price of commodity, income of consumer. Rate of substitutes goods and
the taste and preferences of the customers. As the Outdoor Toys facing the change in the
demand as their shipping costs of trampoline has increases. Thus, its leads to reduces the
demand for the customer. As per this diagram, the demand curve shift to the left from d0
to d1.
 Elasticity of supply: This factor explains that change in the prices of the goods tend to
impact the supply of given goods in the target marketplace. This basically define the
change in the quantity supply as the priced and the supply are positively related to each
other. Cost of production, state of technology and the subsidy given by government are
the certain factors which impact the supply of the given goods in the target market.
Increases in the supply curve tends to shift the supply curve to the right due to the
increase in the supply from s0 to s1 and in case of decrease in the given prices of the
goods tends to reduce the supply of goods and the supply curve will shift to left from s0
to s2.

CONCLUSION
From the above presentation, it is being summarised that the souring price of trampoline's
transportation that will impact the overall fluctuation in the demand and supply in the market.
There are various types of market structure that are perfect competition, monopolistic, oligopoly
and monopoly market. The company is operating its business in monopolistic market as there are
large number of buyer ad seller who are operating its business as they are offering differentiated
goods in the market which is also leading to have huge growth and success in the target
marketplace.

REFERENCES
Books and Journals
Cariou, P. and Guillotreau, P., 2022. Capacity management by global shipping alliances:
Findings from a game experiment. Maritime Economics & Logistics. 24(1). pp.41-66.
Junaid, M., Zhang, Q. and Syed, M.W., 2022. Effects of sustainable supply chain integration on
green innovation and firm performance. Sustainable Production and Consumption, 30,
pp.145-157.
Lu, J. and Li, H., 2022. Can high-speed rail improve enterprise capacity utilization? A
perspective of supply side and demand side. Transport Policy. 115. pp.152-163.
Almeida, and et. al., 2022. When the Whole Is Greater than the Sum of Its Parts: Hotel
Marketing Consortia as a Winning Strategy. In Case Based Research in Tourism,
Travel, Hospitality and Events (pp. 319-341). Springer, Singapore.
Cariou, P. and Guillotreau, P., 2022. Capacity management by global shipping alliances:
Findings from a game experiment. Maritime Economics & Logistics. 24(1). pp.41-66.
Kütük, T. and Eceral, T.Ö., 2022. 10 Discussing Housing Submarkets in the Ankara
Metropolitan Area. Housing in Turkey: Policy, Planning, Practice.