BMP4003 Business Environment: Applying Microeconomic Models to Article

This report provides a comprehensive review of an article concerning the increasing prices of trampolines in the United Kingdom, utilizing microeconomic principles to analyze the situation. It begins by introducing microeconomics and its relevance to business decision-making, particularly in analyzing market competition and consumer behavior. The report then presents the article's argument regarding the price increase due to transport costs and port congestion, linking it to microeconomic concepts such as elasticity of supply, marginal utility, and demand elasticity. It elaborates on two key microeconomic factors: demand and supply, explaining their fundamental role in the economy and how government policies and market structures like monopoly and monopolistic competition influence the business environment. The analysis concludes that understanding these microeconomic factors is crucial for organizations to monitor market trends and customer needs effectively. The report also mentions that the student solutions are available on Desklib, a platform which provides all the necessary AI based study tools for students.

BMP4003 Business Environment
Assessment 1 - Individual Presentation

Article Review - Economic Concepts And
Models
Name:
ID:

Contents
• Introduction
• Argument of the article by using the terms of microeconomic.
• Explain two Microeconomic factors
• Conclusion
• Reference

INTRODUCTION
• Microeconomic is branch of economic that helps the business firm and
organization to make an appropriate future decision. It analyses the
competition in market as well as behaviour of the consumer in relation to
the particular goods and services.
• It is approach which examine the individual commodity of the business
such as single person salary or wages, sale of particular goods, etc.

ARGUMENT OF THE ARTICLE
• Trampoline Profit issue: The article of BBC is explaining that the
trampoline prices are increases rapidly as 40-50% in the United
Kingdom because of the increasing fare of transport and port
congestion which means there are may be hike in price of outside toys.
• These outside toys include swings, trampoline and climbing frames.

CONCEPT OF MICROECONOMIC
• Microeconomic generally includes three concepts that are elasticity of supply,
marginal utility and demand and elasticity of demand. It is also containing the
price theory, utility theory and production.
• In context of the trampoline, the concept of microeconomic are effected the
people of United Kingdom. The price of the product or services are increases; the
demand of the product are decreases which shifts the demand curve in left side.

Explain two Microeconomic factors
• `Demand and Supply- These two are basic
fundamental of economics and the whole
economy of any country depend on Demand and
supply.
• Demand- The willingness and ability of
consumer to purchase a given amount of goods
and services at a given price called demand.

Supply
The willingness of a sellers to offer a given quantity of goods and
services for a given price called supply.
•Law of Supply- The rise in price of goods and services while all other
factors remains constant called law of supply.
•The above diagram of law of demand interpreted that, when Price
increases of a specific commodity then the quantity supply of that
commodity are increases as well as when price decreases quantity
supply is also decreases.

Government Policies
The government policies can affect the business
positively and negatively both but In this case the
company faces a negative impact due increase in
the price of ports which leads to lack of raw
material and increase in cost of production and
affect the supply due to scarcity of resources

Monopoly Market
• In this market there are large number of buyers and
only a single seller who have full control all over
the market and can raise the price of their product
whenever they want and enjoy the super profit
earning in the Economy. In this market the seller is
price maker and the consumers are price taker.

Monopolistic Competition Market
In this market there are large numbers of buyers and large numbers of
sellers selling the same product at the same price but not identical. This
U.K based company is comes under a monopolistic competition because
there many toy manufacturing companies who are manufacturing
trampoline but not identical so that's this company faces a tough
competition in the market and they also have make prices attractive so
that they can survive in the market.

Conclusion/Summary
The above report is concluded that the microeconomics include two
factors supply and demand which helpful for the organisation to
observe the trend of market and nature or need of the customers. The
report is prepared on the basis on increasing trampoline price where
it describe what are the major terms of microeconomic that rise the
50% price of trampoline.