...Economic Factors AIU Online Abstract Before writing a business plan for a new business it is important to research the type of industry this proposed business will enter. This paper will discuss two in particular which are an Oligopoly and a monopolistically competitive industry. Economic Factors Concentration Ratio (CR) is calculated using the total sales accounted for by the four largest firms in the industry. Industry A which has 20 firms and a Concentration Ratio (CR) of 30% is considered to be monopolistically competitive industry. This means there are many producers and consumer in the industry. The main characteristics of a monopolistic competition are; Ease of entry, many producers and consumers where no one business has total control over the market, and producers have some control over price. If the demand for the product rises and pushes up the price for the good, in the long run, new firms would come into the market. This would cause prices to come back down as competition increases and eventually there would be price equilibrium. Industry B has 20 firms and a Concentration Ratio (CR) of 80% is considered to be an Oligopoly. There are three main characteristics of an oligopoly. The first is that it is comprised of a small number of large firms. The second is identical or differentiated products which means while some oligopolies produce identical use of raw materials to make products used by other industries while others concentrate on products...
Words: 474 - Pages: 2
...Economic Factor | Definition | Relevance to the UK | Positives and negatives | Inflation | * Inflation is when there is an overall rise in the price of goods across the economy. The CPI (Consumer Price Index) is the official measure of consumer prices. If it goes up then inflation is taking place | * In terms of the UK, inflation is occurring across the economy. General prices of things like bread, fuel and other every day products have increased in price. | * | Supply and Demand | * Supply- the amount of products available to customers * Demand- the amount of products the customers require | * Because of the way society has developed, the demand for everyday products and services only increase. Although there may be varying demands for different products and industries, in general the growing population demands an enormous volume of product. The supply at present is sufficient enough to meet demand, but with an increasing population and the amount of resources becoming less and less, we can imagine that the general demand will soon exceed the supply. | * | Stability of Government | When the government regularly monitors the economy with political authority over actions and affairs. | | | Recession | * A temporary depression in economic activity or prosperity. This happens when people stop spending money possibly due to inflation | * The uk is currently out of recession as people | * | Interest rates | These are set by banks to determine...
Words: 290 - Pages: 2
...Economic Factors & Legal Concerns Introduction The current business environment is an ever-changing and dynamic environment where most business operates. There are a number of factors that can have an impact on the operation of a business. These items are legal factors which can be an important factor that should be kept in mind while a business conducts its business activities. Another will be that of economics and the associated factors, these are considered the most important factor in all other external factors that affect the operation of a company or organization and will be at all levels which will include the local levels, and the state and national levels as well (Conklin, 2006). The economy is always going to be a concern that could affect organizations effectiveness. It is important for management to consider economic factors and legal concerns in conducting business operations. The economic factors are described as the factors that affect the financial issues of the businesses to include labor, taxes, interest rates, etc. The business environment entails both internal and external factors. The external will be the ones that are beyond the control of the business itself. The internal factors will be items that can be controlled by the business. Economic policies of government, capital market and business cycle are an important part of the economic environment of a business. The legal environment will include the laws and rules that regulate businesses...
Words: 1480 - Pages: 6
...Economic Factors When people hear the word “microeconomics” they may automatically think of unemployment, the housing market, taxes and income. These thoughts are correct. Microeconomics is the study of growth between people and their resources. Economics studies land, income, labor, taxes, investments and government expenditures. Mostly, economics measures the behavior of industries, the government and countries as a whole. The study of economics will determine connections between employment and spending as well as the growth of the economy. There are many factors that can affect the economy. These factors may include: the unemployment rate, inflation rate, interest rate and gross domestic product. , The gross domestic product is the total market value of goods and services produced in the economy over a year. The gross domestic product is one of the primary indicators used to measure the health of the economy. Economists rely on the comparison of the gross domestic product from year to year to determine if the economy has grown. The real gross domestic product is the total market value of goods and services, stated in prices over a year. The real gross domestic product provides more accurate numbers. The nominal gross domestic product is the gross domestic product where inflation has not been taken into account. Gross domestic product may appear higher than it really is if inflation is not accounted for. The unemployment rate is the number of people...
Words: 694 - Pages: 3
...ECONOMIC FACTORS THAT MAY RESTRICT THE AVAILABILITY OF NEW PRESCRIPTION DRUGS: Production and availability of new prescription drugs has been influenced by various economic factors which therefore is restricting and holding back new prescription drugs being developed and released to the public. Nearly all pharmaceuticals have an enormous research & development cost and relatively low marginal costs of production; therefore causing marginal cost pricing to not break-even. The high cost and low returns may not sound too attractive for some major firms however; many pharmaceuticals try their best to get a patent which means they can price their products above the marginal cost considering their competition would be weak. However this isn’t this simple, there are various procedures, costs and rules when obtaining a patent which reduces the amount of investment in research and development for new prescription drugs due to the uncertainty of returns and patent. The table to the left just shows how enormous the research and development costs are in contrast to other industries including computer services, oil and gas and chemicals. The table to the left just shows how enormous the research and development costs are in contrast to other industries including computer services, oil and gas and chemicals. (The 2009 EU industrial R&D scoreboard) The pharmaceutical industry is considered to be in the oligopoly market and is allocative and productively inefficient. At profit...
Words: 353 - Pages: 2
...the macro and micro-economic factors that drive the pharmaceutical industry with a brief insight into how these levers impact the key players and decisions in the sector. The report will also relate the key drivers of the industry to the pharmaceutical industry in Ireland and how it is facing these global challenges. Historically, the sector was dominated by large scale bulk compound manufacture but this has evolved into a diverse range of complex technologies and treatments. In order to elaborate/detail on how this influences the strategy of individual organisations, we will highlight some of the activities of Glaxo-Smithkline (GSK) and how this company has evolved to adapt to the dynamic nature...
Words: 2748 - Pages: 11
...Islam considers the factors of production as a means using the wealth and the effort of the person to produce commodities in order to maximize his living needs that based on a concept of Halal and Haram, and any means used outside this concept no matter the goods are do not consider production in the view of the Shari’ah.In capitalist economy, the primary right to wealth is enjoyed by the factors of production, but however,in the theory of Islam, the factors of production are not well defined, not is their share in wealth determined in exactly the same way as is done under the Capitalist of economy. In fact, the two ways are quite distinct. From the Islamic point of view, there are four factors of production, which are capital, land, labour...
Words: 1493 - Pages: 6
...------------------------------------------------- ASSIGNMENT (GROUP) INTERNATIONAL MANAGEMENT (MGT-4030) GROUP MEMBERS NAME DANUSHAN KEISHIA ASHFAAQ DILKI SENURA NASHA FATHIMATH (1828) GROUP MEMBERS NAME DANUSHAN KEISHIA ASHFAAQ DILKI SENURA NASHA FATHIMATH (1828) CONTENTS INTRODUCTION ECONOMICAL FACTORS UNEMPLOYMENT RATE IN CHINA Unemployment Rate in China stayed unaltered at 4.05 percent in the final quarter of 2015 from 4.05 percent in the second from last quarter of 2015. Unemployment Rate in China arrived at the midpoint of 4.13 percent from 2002 until 2015, achieving an unsurpassed high of 4.30 percent in the final quarter of 2003 and a record low of 3.90 percent in the second from last quarter of 2002. UNEMPLOYMENT RATE IN ANGOLA Development and evenhanded improvement are obliged by the unfavorable business environment, lacking administration and straight forward in the administration of open assets, frail quality and upkeep of physical base, constrained nature of HR, feeble farming development, wasteful open administration conveyance to poor people, and troubles in overseeing salary from non-renewables to make investment funds for future eras. Social weights are expanding because of the high unemployment rate (26%), especially among youth; critical neediness, influencing 36.6% of the populace; and high wage imbalance. UNEMPLOYMENT RATE IN MEXICO Mexican jobless rate came in at 3.96 percent in December of 2015, the same as in the earlier month and the least...
Words: 888 - Pages: 4
...Introduction: Apple and Samsung are the two greatest companies in the world, when it comes to supply of Mobiles phones, laptops And TV’s. The fierce competition between Apple and Samsung is going on from a long time. And surely the consumer’s across the World are benefited by this competition. Apple Inc. is an American multinational partnership headquartered in Cupertino, California, that plans, creates, and offers buyer gadgets, machine programming, online administrations, and Pcs. Apple was established by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1, 1976 to create and offer Pcs. It was named Apple Inc. on January 9, 2007 to reflect its moved center towards buyer hardware. Its best-known fittings items are the Mac line of machines, the ipod media player, the iphone cell phone, and the ipad tablet machine. Apple has ceaselessly concocted imaginative items making it the most significant organization on the planet and abandoning all its rivals Samsung (Hangul: 삼성; hanja: 三星; Korean articulation: [sʰamsʰʌŋ ɡɯɾup]) is a South Korean multinational combination organization headquartered in Samsung Town, Seoul Samsung was established by Lee Byung-chul in 1938 as an exchanging organization. Throughout the following three decades, the gathering broadened into zones including sustenance transforming, materials, protection, securities and retail. Samsung entered the hardware business in the late 1960s and the development and shipbuilding commercial enterprises in the mid-1970s;...
Words: 1105 - Pages: 5
...7. HEALTH PROMOTION The research work is on the impact of economic factors on health promotion. The research was carried out on an elderly patient with limited income, who have to decide which of the medications he will get refilled due to lack of income. Literally it means he is taking half of his medications prescribed by the physician or nurse practitioner. Another scenario is that of a community health nurse promoting health in Oak Park a low-income area. As she does her visit she realized that there is no grocery shop that sells fresh fruits and vegetables in Oak Park. She decided to carry out health education on nutrition with families as caseload, the response from all the families is that local convenience stores only stocked prepared...
Words: 1188 - Pages: 5
...the heavy cost of internal suppression of dissent. This suppression of dissent robbed Indonesia’s economy of the vitality and incentives associated with a free-market economy in which individual property owners, who in the process of seeking to accumulate wealth enrich the entire economy and create economic growth. While Indonesia has since overthrown the dictatorial government, corruption and red tape remain rife at almost all levels of government in Indonesia. A World Bank study revealed how excessive red tape in Indonesia hurts business activities: An entrepreneur in Indonesia must wait an average of 151 days to complete the necessary paperwork to start a business, compared to 30 days in Malaysia and a mere 8 days in Singapore, severely hampering the Indonesian entrepreneur’s speed and desire to participate in the economy. In turn, the excessive red tape translates into long lines of government bureaucrats, whose low salaries make it attractive for them to seek a bribe at every step of the business transaction, further distracting and detracting the entrepreneur from legitimate business pursuits. In addition to these political factors, Indonesia also suffers from economics factors that hinder growth. Indonesia’s poor infrastructure makes it difficult to conduct business: A poor infrastructure in roads signifies that it is difficult to transport goods and services to the consumers, and may even hinder export-related businesses if companies cannot ship the finished intermediary...
Words: 272 - Pages: 2
...Cultural and Economic Factors which has an influence on the Attachment Theory. Cultural: * As we all know that it is a universal and most natural process when a baby forms his/her attachment with its primary care giver most of the time it is the mother and often can be the father or other people within the family net work. * Attachment is perceived with variations in different parts of the world e.g. the west compared to the east and so on. * Different cultures have so many other ways that they form attachment with their little ones and it is different as what makes a secure attachment in their judgement and understanding. For example let me throw some light on the Dogan’s who are an ethnic group living in the central plateau region of Mali in Africa where the mother is the central attachment figure. She spends her maximum time with her infant along with also sleeps with her baby. Bearing this in mind the secure attachment formed was 87% categorized as secure attachment. Mother’s constant presence lessened the chances of the avoidance. * In the same way attachment can be broadly applied as not all secure attachments are the same.. For example secure Japanese children cry less often when leaving their mother’s arms than the secure German children. Yet both groups Japanese and the German children have the same secure attachment. Economical: Now I would like throw some light on the attachment disorders which are caused by the economic factors: * The disorganised...
Words: 514 - Pages: 3
...Discuss the political and economic effects of different types on transnational organizations. SAN3508 Aravinth Raj Palpandian 1 Introduction This essay has the topic of how political and economic factors of different types affect a transnational organization. It is a theory and concept based essay using frameworks from the course literature. The main body of our essay will contain answers to below queries: What is globalization and how it gave rise to Global firms (stimuli). How Economic factor leads to certain advantages and attributes of Global firms / Transnational Corporations / Multi National Enterprises. How does country related political factors affect these firms and their policies. Then, we conclude our essay based on the finer details derived from our extensive discussion. Concepts and examples that are used to answer our queries in main body fall under the following topics: Globalization and global firms. Stimuli for becoming transnational: which in short is to prove that market-economy driven industries eventual step for growth is to go global. Economic Attributes and Advantages. Political factor and Conclusion. Globalization and Global Firms According to Hall (2011), a change has been occurring steadily over a span of last three decades where we have been moving away from a world in which national economies were a singularity and remained largely self-contained due to varying differences between them. We are working towards a...
Words: 2226 - Pages: 9
...FACTORS WHY SOME STUDENTS IN MSU-IIT DON’T KNOW ABOUT ECONOMICS ______________________ A Research Proposal Presented to the Department of Business Economics College of Business Administration and Accountancy MSU-Iligan Institute of Technology ______________________ In Partial Fulfilment of the requirements for the Course Economics 102 Econometrics _____________________ Jaycris C. Arquion August 2013 Ignorance in Economics Subject is not offered in the course taken courses that offers economics subject lack of interest promotional activity of the subject CHAPTER 1 Introduction CHAPTER 2 Review of Related Literature This study discusses the factors why people do not know economics. The researcher gathered the related literatures that are considerably helpful in conducting this study. This chapter encompasses the following categories which are mainly the economics and its meaning, the benefits of knowing economics and reasons why people are oblivious about economics. Economics and its Meaning People of today’s generation are only aware of economics as an activity in which only supply and demand of a certain product is concerned. According to Robbins (2013), Economics is the study of given ends and scarce means. It is the science which studies the human behavior as a relationship between given ends and scarce means which have alternative uses. In connection to this, Economics is all about making choices. Meanwhile, Caplan and Henderson...
Words: 842 - Pages: 4
...Global Economic Environment In: Business and Management Global Economic Environment Global Economic Environment Generally, global economic environment is influenced by various factors such as technological, environment, political, socio-cultural, and demographic that directly affects businesses. Economic environment refers to the nature of economic systems and policies, distribution of income and wealth, and level of income. Indeed, economic environment has a complex and very dynamic nature; it is continually changing along with the changes in political situations and government policies. Global Economic Environment Mainly, global economic environment is comprised of several components including the economic systems, conditions, policies, legislations, and environment. Indeed, the economic policies being imposed in every business unit are significantly influences by the overall condition of economy. This includes the improvements that occurred in economic conditions such as the purchasing power of the public, standard of living, distribution of income, and supply and demand. Mainly, these factors reflect the size of the market. Another factor reflecting the economic condition is the business cycle, which is critical to every business unit. It refers to the different stages such as prosperity, boom, decline, depression, and recovery. The economic condition of a country can be understood through its national income, per capita income, and distribution of income, demand and...
Words: 279 - Pages: 2
