Analysis of Economic Profit and Business Organisation in UK Market

This report delves into the intricate relationship between economic profit and business organisation, focusing on microeconomic concepts and market structures. It examines the challenges faced by a UK-based toy manufacturing company due to rising shipping costs and raw material prices, impacting their ability to generate economic profit. The analysis covers various market structures, including monopoly, oligopoly, perfect competition, and monopolistic competition, emphasizing the importance of market analysis for strategic decision-making. The report concludes that continuous market evaluation using microeconomic tools is crucial for businesses to achieve their objectives and sustain market stability, suggesting that proactive measures, such as strategic raw material procurement and cost control, can mitigate potential losses. Desklib offers a wealth of similar resources for students.

Economic profit and
business organisation

Contents
 Introduction
 Microeconomic Concepts
 Market Stricture
 Economic Profit and Business Organization
 Conclusion
 REFERENCES

INTRODUCTION
 To sustain the stability between the demand
and supply of the product various methods,
tools and technology of economics are used
(DiMaggio, 2019).
 This report also include the various methods
by the helps of which the toy making based in
UK company can control their prices so that
they can sell their product in market.

Micro-economic Concept
 It refers to the complete evaluation of the individual firm, company and household's
behaviour and helps in decision making and allocation of resources when there is change
in the prices.
 It can be positive and negative both. It also evaluate the situation of toy making company
based in UK in which the prices of the Trampoline are increase by 40 to 50% due to
increase in shipping cost or rise in price to haul a container.
 After all this event the company is not able to import there raw material from China.

Market Structure
 It include various types of market and each market have different features , the various kinds
market are Monopoly market, Oligopoly market, perfect competition market, and Monopolistic
competition.
 All the organisations are categorised in these markets according to their nature and capacity. For
example if any company have a large no. of costumer and that company is only one who
produce these kinds of products in the market.
 After analysing the market the company saw an opportunity of earning of earning super profit
and start selling the product at the price what ever they want.

Continue…
 Oligopoly market refers to that market where there are large number of buyers and only
two and three sellers these sellers are also known price maker because they also determine
there price and have control all over the market according to their share.
 Perfect competition market is not realistic and it include only theoretical concept because
this market tells that there is transportation cost and it not possible for any kind of
business who did not bear any transportation cost and the another feature is that the seller
selling homogenous product at the same price which cannot be possible in the real world
all companies have some kind difference in their products.

Economic profit and business
organisation
 Economic profit refers to the variation between total
revenue less Cost of product and opportunity cost.
 Opportunity cost refers to the amount of the next best
alternative when an individual organisation made
decision.
 It is not important for the business to record the
economic profit in books of accounts and also not
important to show these profit to the investors or
creditors.

Continue…
 After all this happening the price of Trampoline also get increase by 40% to 50%.
 According to the fact and figure the price of a 40 foot container get increase from 6£650
to £1800 which is almost triple from last year as a result the company not able to generate
the economic profit which they used to earn in the past.
 In-fact the companies start suffering losses, so to bring out from that position the Toy
manufacturing company have to analyse or estimate the future opportunities and select the
best one which is also have to be accurate from where they can generate the economic
profit in future.

CONCLUSION
 From the above report it can concluded that the analysis of the Business and its factors is very
important because the organisation analyse or evaluate the market conditions continuously the
organisation can successfully attain their objectives.
 All the analysis and evaluation process can be done by the help of micro-economic concept's tools
and methods.
 If this toy manufacturing company analyse the market accurately then it may be possible for them to
take some precautionary measures.
 Such as importing of extra raw material and control the cost of the production which helps them to
sustain in the market and also maintain the supply of product due to this the price the demand can
also maintain in the market.

REFERENCES
 Albanna, H., Alalwan, A.A. and Al-Emran, M., 2022. An integrated model for using social media
applications in non-profit organizations. International Journal of Information Management, 63,
p.102452.
 Dias, Á., Silva, G.M., Patuleia, M. and González-Rodríguez, M.R., 2020. Developing sustainable
business models: Local knowledge acquisition and tourism lifestyle entrepreneurship. Journal of
Sustainable Tourism, pp.1-20.
 DiMaggio, P., 2019. Social structure, institutions, and cultural goods: The case of the United
States. In Social theory for a changing society (pp. 133-166). Routledge.