Economic Review: Shipping Costs Impact on Trampoline Prices

This report analyzes the economic factors contributing to the potential rise in trampoline prices due to increased shipping costs and port congestion. It examines the main argument of an article discussing a potential 40-50% price increase for trampolines, attributing it to Brexit-related shipping industry challenges. The analysis applies microeconomic theories, including demand and supply, and market structure, to understand the relationship between shipping costs, product prices, and consumer behavior. It concludes that the outdoor toy retailer operates in a perfectly competitive market, limiting its control over pricing. The report references several academic works on microeconomics, wellbeing, sustainability, and pricing strategies to support its arguments.

ARTICLE REVIEW
ECONOMIC CONCEPTS
AND MODELS

Table of content
• Introduction
•Main Argument of the Article “Trampoline Price ‘to soar 50% on shipping cost”
•Application of two theory of Economics over present article main issues
• Conclusion
• References

Introduction
 Economics is basically a social science because there are many variables that affect the ultimate
outcome so the economist have to consider all those variables thoroughly.
 The current presentation will be based on the Article name “Trampoline price ‘to soar 50% on
shipping cost”.
 On the basis of this article the presentation will discuss the issue arises due to Brexit and long-
term consequences for the shipping industry.
 The presentation will further discuss, how the price of trampoline outdoor games could rise by
40% to 50% in the upcoming year because of the rise in the shipping cost.

Main argument of the article “trampoline price
‘to soar 50% on shipping cost”
 The main argument of the present article is that due to the rise in the transport cost and port
congestion, the price of Trampoline could rise or soar by 40% to 50% which make the
larger outdoor games more expensive as per statement of owner of Outdoor Toy retailer.
 The owner of outdoor games retailer has also argued that whether the people of UK will
buy the new outdoor games at high price or premium or not.
 The rise in the price of there trampoline products will leads them to lose their customer
base as the customer will not buy the products whose price increases drastically.
• As per the Law of Demand theory concept of microeconomics, there is always an inverse
relationship between the price and the necessity products.

CONTINUE
• It is because of the price theory concept of microeconomics.
As per this concept, the change in the transportation cost will
directly leads to the change in the price of products which is
transported using large containers.
• As per incentives and behaviour concept of microeconomics,
the transportation company such as Haulier has increased its
shipping cost after visualising that their demand in the market
has increased due to the rise in the demand of the Chinese
products or large outdoor games.

Application of two theory of economics over
present article main issues
• The main issue discussed in the article is rise in the Trampoline products
price due to high shipping cost and port congestion.
• In order to further understand this issue more deeply, the two theories of
economics can be applied is as follows:
Demand and Supply theory:
• This is a theory of economic which state the relationship between the
price to the demand and supply of the products and services.
• This theory state the point where both supplier as well as buyer are ready
to sell or buy a product and services at specific price and that point is
known as market equilibrium point.

CONTINUE
Market Structure Theory:
• This is also one of the theories of economic which state the
structure of the market reflects whether the consumer will buy
their products at high price or not.
• It means based on the products and services of firms that they
offer the firms are differentiated and categorized.
• There are four type of market structure such as perfect
competition market, monopolistic competition, monopoly and
oligopoly.

CONCLUSION
• After summing up the above information, it has been concluded that the rise in the price in
trampoline outdoor product of Outdoor Toy company is the biggest issue that has arises due to high
shipping cost and Brexit.
• The presentation has also concluded the argument covered in the article and how it relates to the
various concepts of microeconomics.
• Lastly, the presentation has concluded the application of two theory of economics in current issues
such as demand & supply along with market structure theory.
• The presentation has concluded that the market structure of Outdoor Toy retailer is perfectly
competitive market where company have no control over the price of its products.

REFERENCES
• Becchetti, L., Bruni, L. and Zamagni, S., 2020. The Microeconomics of Wellbeing and
Sustainability. Recasting the Economic Process. 480.
• Borland, J., 2020. Microeconomics: Case Studies and Applications. Cengage AU.
• Osborne, M. J. and Rubinstein, A., 2020. Models in Microeconomic Theory ('He'Edition) (p.
362). Open Book Publishers.
• Browning, E. K. and Zupan, M. A., 2020. Microeconomics: Theory and applications. John Wiley
& Sons.
• Hafezalkotob, A. and et.al., 2018. Wholesale-retail pricing strategies under market risk and
uncertain demand in supply chain using evolutionary game theory. Kybernetes.