Reviewing Brexit's Microeconomic Impact on Outdoor Toys Company

This report provides a microeconomic analysis of the impact of Brexit on Outdoor Toys, a UK-based toy manufacturing company. The central issue revolves around the increased shipping costs, particularly a 50% rise in trampoline shipping, and how this affects the company's production and pricing strategies. The analysis uses microeconomic concepts like supply and demand, cost and production to explain the challenges faced by James Owen, the owner of Outdoor Toys. The report highlights how increased shipping costs may lead to a 40-50% increase in trampoline prices in the UK. It further discusses the impact of port congestion resulting from Brexit, affecting employee wages, material costs, and overall production expenses. The conclusion emphasizes the significant disruptions caused by Brexit to the shipping industry and its implications for companies like Outdoor Toys.

Article Review
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TABLE OF CONTENT
 INTRODUCTION
 EXPLAINING THE MAIN ARGUMENTS USING MICROECONOMIC TERMS/
CONCEPTS
 APPLYING THE ISSUES ON THE TWO FACTORS
 CONCLUSION
 REFERENCES

INTRODUCTION
 Economics is defined as the social science that used to have study about the production,
distribution and the consumption of the products and services.
 The economics concepts sued to explain that how the person should purchase in the
market.
 There key concepts of the economics are supply, scarcity, demand, costs, etc.
 The current presentation is based on the Outdoor Toys which is the toy producing
company.

EXPLAINING THE MAIN
ARGUMENTS USING
MICROECONOMIC TERMS/
CONCEPTS
 Microeconomics refers to the study of what is going to happen when the single
person is making the choices in order to have changes in the incentives, prices,
various method of production and resources.
 By having the positive microeconomics it makes to know about the economic
behaviour of the people and what they expect from the changing condition.
 The individual in the economy are often grouped in the buyers, sellers and the
owners of the business.

CONTINUED....
 As the business of the James Owen, is used to produce some products in the United
Kingdom and by rising in the shipping cost will be more expensive and this will affect
the production of the company.
 The main argument was in the articles was increasing in the Trampoline prices by 50%
on shipping cost. As the company was the toy manufacturing company so the
production of the company will be affected by the rise in the prices of shipping.

CONTINUED
 By increase in the shipping prices the owner of the Outdoor toys, James Owen has predicted
that by increase in the shipping prices will affect the cost of the trampoline in the UK in this
summer.
 The prices of the trampoline may be increased by the 40% to 50 % in the coming summer in
the Untied Kingdom.
 The owner of the company also predicted that the port congestion will be getting increased by
the happening of the Brexit.
 The Brexit was happened and in this the United Kingdom has withdrawal its process from the
European Unions.

APPLYING THE ISSUES ON THE TWO
FACTORS
 Demand and supply
 Cost and production

Demand and supply
 Demand: Demand is defined as the economic principles which refers the customers
to purchase the goods and services and in return they must pay prices for the goods
taken and services availed.
 By having the other factors constant, if there is increase in the prices of the products
and services than there will be decrease in the supply of the products and services in
the market.
 As there is the inverse relation between the demand and supply in the market.

CONTINUED....
 Costs and production- it refers to all the costs that are included when a firm offers a
service a good.
 Cost and production of trampoline also get affected because of Brexit. It has impacted
employee salary, wages, cost of material, labour, factory maintenance and shipping costs.
 Nowadays, people are more concerned about cost of product, they are more attracted
towards low cost.
 If customer feel that they are not getting enough benefit of product price they will go for
other option and switch to other company to satisfy their purchasing needs says owner of
the outdoor toys.
 It has been said that there is an inverse relationship between costs and production.

CONTINUED....
 If the production cost is lower than the company can
achieve high profitability. However, low production
cost do not necessarily guarantee a high profit margins.
 Basically it depends on situation of market and
business economy.
 If the production costs are expenses such as labour, raw
materials then company has to make large amount of
investment to sell it to customers.
 It has been noted that Brexit has impact the variable
cost of the firm which include utility cost, direct labour.

CONCLUSION
 From the above presentation it is concluded about the issue caused by the Brexit which
has affected the shipping industry.
 The presentation has evaluated about the main arguments that is based on the articles
on the microeconomic concepts.
 Further this presentation has described the two main theory applying on the given issue
in the presentation.

REFERENCES
 Corsetti, G., Crowley, M. and Han, L., 2022. Invoicing and the Dynamics of Pricing-to-
market Evidence from UK Export Prices around the Brexit Referendum. Journal of
International Economics.p.103570.
 Crowley, M .A., Corsetti, G. and Han, L., 2020. Invoicing and the Dynamics of Pricing-to-
Market: Evidence from UK Export Prices around the Brexit Referendum.
 Guerrina, R. and Masselot, A., 2018. Walking into the footprint of EU Law: unpacking the
gendered consequences of Brexit. Social Policy and Society. 17(2). pp.319-330.
 Saville, C. W., 2020. Mental health consequences of minority political positions: The case of
brexit. Social Science & Medicine. 258. p.113016.