Impact of Shipping Costs on Trampoline Prices: Microeconomic Analysis

This report examines the economic factors influencing the soaring prices of trampolines, particularly focusing on the microeconomic principles of supply and demand. It analyzes an article from BBC News highlighting the impact of increased shipping costs on trampoline prices and the challenges faced by toy retailers in the UK. The report delves into core microeconomic concepts such as demand, elasticity of demand, supply, and elasticity of supply, explaining how these factors affect the trampoline market. It discusses how changes in price, consumer income, and the availability of substitute goods influence demand. Furthermore, it explores the factors affecting supply, including production costs, government subsidies, and technological advancements. The analysis concludes that rising trampoline prices, driven by increased shipping costs, significantly impact supply and overall market dynamics, emphasizing the interconnectedness of microeconomic principles in real-world scenarios. Desklib provides a platform for students to access similar solved assignments and past papers.

Economic Concepts and
Models

INTRODUCTION
Economics is the analysis of the scarcity of resources which are meant to produce the
goods and services so that they can full fill the needs and demand of the target market. This
basically evaluates the demand and supply in the market and flow for the same. There are
various variety of complex issues that are emerging in the large market. Microeconomics and
macroeconomics are the aspects which ensures the better working of the employees in the target
market. This respective presentation will cover the articles which is related to the souring prices
of trampoline due to the increasing shipping cost of trampoline for the same. This presentation
also cover the concept of microeconomics in which it illustrate the demand, elasticity of the
demand, supply elasticity of supply.
MAIN BODY
Trampoline's profit Issues
This is being stated from the article of BBC News, souring prices of trampoline is taking
place due to the increasing shipping cost of the trampoline around the world. This is being
known from the game retailer who is operating its business in the market. In context to Outdoor
Games, James Owen is the owner of this company who is operating in toy retailing industry.
Major change in the entire transportation cost and it is high specially on the large size toy that are
climbing frames and trampoline. All the toy retailer are operating in the UK are facing huge
loose in the market which is impacting the entire profitability of the industry. According to the
report, it is being derived that the rise in the trampoline prices by 40-50% and the toy retailer are
getting nay space out of China and they are not getting nay of the consideration out of the Chine
by which they can ensures their profits and revenue. Mr. Owen also given the various
explanation that the large variety of products are being produced in the market but rising on the
hike in the given prices of trampoline which is impacting the overall functionality of the
company.
Concepts in Microeconomics
It is the study which analyse that what is likely to happen as the individual make choice
in relation to the certain change which is related to the price, resources, method of production
and so on. Individual are the microeconomics subgroup which includes the seller, buyer and
business owners.

Demand is defined as the choice of the individual by which they can buy the particular
products and services and also having the effective purchasing power to buy the specific goods
and services and also have the capacity to buy the same. This is being stated that when the given
prices of products tends to increase then the particular demand of goods and services decreases.
It is being analysed from on of the article, demand for Chinese goods is keep rising around the
world and they are basically estimating the given situation with the better analysis of shipping
capacity.
According to Law of demand, there is the indirect relationship in the price & the quantity
of goods in the target market. There are certain aspects which are similar in the market and also
having the appropriate approaches in the given market.
Following are the factors which is influencing the particular demand of trampoline which
are explained as follows:
 Price of the given goods: These are the commodities which are being purchased to the
large customer base by which they can rightly ensures that they are operating in the
market as well and generating huge profitability in the target market. This is being known
that the consumer is always pick the goods which are affordable to them so that they can
rightly ensures the huge profitability and revenue. In relation to trampoline, when the
particular prices of the commodity is rising day by day that is making huge impact on the

buying behaviour of the consumer. This is clear that when the prices of 40-foot long
container is getting triple since in the particular year. It is being stated by the report of
Drewry that the given prices of the trampoline increases then the demand for such goods
tends to decreases in the target market.
 Income of the consumer: It is given that the respective prices of goods and their demand
in the target market. It is being stated that when the income of the consumer tends to rise
then the demand of their particular goods increases in the target market. In context to
trampoline, people are having high income level that is making the effective
consideration among the quantity products in the sufficient income level.
 Price of related goods: There are basically two types of goods such as substitute goods
and complementary goods. Substitute goods are those goods which is being replaced by
the other goods as they are basically offering the same level of satisfaction in the target
market. Thus when the prices of substitute goods tends to rise then the demand for
current goods increases in the target market. On other hand, complementary goods are
those goods which are used as the conjunction of original goods which is giving similar
level of satisfaction in the target market. Thus, when the prices of complementary goods
increases then the demand for the current goods reduces as the overall prices of such
goods tends to rise in the target market.
 Taste and preferences of customer: These are the aspect which includes the choices and
the taste of buyer when tends to have more consideration in the given marketplace. They
respectively tends to buy less amount of goods and services. When the people are liking
the products then the respective demand for the same tends to rise in the market. On other
hand, outdated products tends to reduces the demand of goods in the target market and
company will face huge loose in the given market segment. In consideration to
Trampoline, When the people are choosing trampoline over other goods then the demand
for the same tends to rise in the large market.
Elasticity in Demand
This is also known as the change in the demand of goods tends to rise in the market due
to change in the various aspects which includes the income of consumer, prices of given goods,
choices of the buyer and future expectations of the consumer. When there is the impact of such
aspects on goods then the demand of such goods tends to fall or rise in the respective market

place and this is being derived from the market. In relation to Trampoline, change in the demand
of commodities shift the demand curve to right or left which leads to increase or decrease the
entire demand of goods in the target market.

This is being derived from the above given diagram that increase in the demand of goods
tends to shift the demand curve to the right as this is showing the positive impact of goods in the
target market. In context to trampoline, when people are purchasing more then the demand for
trampoline tends to rise and rightward shift to the demand curve from d0 to d1 as it is showing
the positive impact on the entire demand curve of trampoline.
Supply is the aspects that analyse the total available amount of goods and services to
their prospective buyer. This is basically related to the entire amount of goods which are
available for the further sale in the given market place and due to which they can ensures the
huge revenue and sales.
Law of supply:
It is being derived from the large market pace that the supply is having the positive
consideration in the given prices of goods in the target market which leads to have the change in
the supply of goods in the target market. There is no such change in the other factors as rise in
the prices of goods tends to increase the overall supply of goods in the target market. It is being
stated that seller sell their products when there is hike in the prices of their products. On other

hand, fall-down in the given prices of goods tends to decrease the supply of goods in the target
market. In context to trampoline, increase in the given prices of trampoline tends to enhance the
overall supply of goods in target market.
Factors affecting supply of the specific good are as follows:
 Production cost: It is being driven that the when an organisation or its manufacturer is
having the sufficient raw material and other factor of production then they will supply
more in which they are operating in. Thus, in context to trampoline, when the supplier is
having the sufficient raw material then the respective supply of goods tends to rise in the
market. On other hand, when the supplier do not have the limited raw material and
talented employees then the supply for their goods tends to fall-down in the market.
 Government Subsidies: It is defined as the direct and indirect payments which is being
offered by the government so that supplier can supply more of their goods and services in
the target market and leads to attains the overall profitability in the target market. In
context to trampoline, when the government is offering more subsidies then the
respective supply of goods tends to rise as the consumer will supply more to their
potential customer in order to generate more revenue and profitability.
 State of Technology: In the current market, new technology are taking place in the
market they are over taking the other firms which are operating in the given market.
When the firm is using the advance technology for producing the right goods and
services then the supply of goods increases as they are using appropriate method of

expectation by which they can do the bulk purchasing, quick billing and so on. In context
to trampoline, when the manufacturer are offering the innovative and easy to use goods
which leads to have more success in the market. On other hand, when the suppliers are
operating its business with the help of certain technology then this leads to increase the
overall consideration in the market.
Change in Supply Curve:
This is also called as the elasticity of supply due to the change in the market which
directly linked with the change in the given prices and the supply of goods & services. As the
supply curve will shift to right as increase in the given supply of goods in the large market and
on other hand leftward shift in the supply curve tend to slow-down the overall supply of goods in
the market.
It is being analysed from the above given curve that when the price of product increases
which leads to rise the overall supply of goods in the target market. Where as the given prices of
trampoline decreases then the overall supply for the same also decreases in the marketplace.
CONCLUSION
From the above report, it is being derived that the increasing prices of trampoline
influencing the overall supply and ensuring more profits to the company. Demand and supply are
the two wheels of microeconomics, which is ensuring the effective flow of goods and services in

the target market. Given price of commodity, income of consumer, taste and preferences of
buyer are the certain aspects which is directly impacting the demand of goods in the market.

REFERENCES
Books and Journals
Hofmann, F., 2019. Circular business models: business approach as driver or obstructer of
sustainability transitions?. Journal of Cleaner Production, 224, pp.361-374.
Haggett, P., 2019. Changing concepts in economic geography. In Frontiers in Geographical
Teaching (pp. 101-117). Routledge.
Online:
Trampoline prices 'to soar 50% on shipping costs', 2021 [Online] Available through
<https://www.bbc.com/news/business-55702243>