Does obesity and poverty go hand in hand? Are the poor getting fatter, while the rich get skinnier? The correlation between obesity and poverty is quite simple, healthier foods are more expensive, and most people who don’t have money don’t have gym memberships and have more of a sedentary lifestyle. When going into any “health food store”, you will notice immediately the price difference between healthy foods and junk foods. Fruits, vegetables, unprocessed foods, organic, and lean meats are all expensive.
They will also be more likely to buy the premium diapers that they do not usually purchase due to the higher price. If the price of diapers increases, total revenue will decline. Since there is a large volume of brand substitutability in this industry, if one brand increases their price, consumers can easily switch to another. * Market Structure * The disposable diaper industry would be classified under monopolistic competition. This is due to the relatively large amount of sellers, differentiated products, and easy entry and exit from the industry.
As the retailers incur virtually no costs by changing suppliers it is easy for them to play them against each other to get better terms. This negative effect is heightened by high supplier volume. As discount retailers account for a large percentage of their revenue, suppliers don’t have strong negotiating power. Power of Buyers – Low-Medium Purchases are not a large part of total income which
This will lead to firms using latest technology to produce at lower costs. Disadvantages • Unemployment: Businesses in the market economy will only employ those factors of production which will be profitable and thus we may find a lot of unemployment as more machines and less labour will be used to cut cost. • Certain goods and services may not be provided: There may be certain goods which might not be provided for by the Market economy. Those which people might want to use but do not want to pay may not be available because the firms may not find it profitable to produce. For example, Public goods, such as,
Therefore, if MPC and consumer confidence is at a low, consumers will spend less and save more therefore resulting in a decrease in total consumption levels. This consequently will result in an increase in taxation, as there is a decrease in the circular flow of income, meaning governments have to increase taxes in compensation for the lack of spending. Due to this taxation increase the level of real disposable income, or RDI, amongst consumers will decrease and therefore decreasing consumer
This essentially means that if the price increases, the quantity supplied will also increase, and conversely if the price goes decreases, the quantity supplied will decrease. If there is any excess in supply, there is a surplus, which decreases the price of the product. According to McConnell, Brue, & Flynn (2009), the six determinants of supply are: resource prices, technology, taxes and subsidies, prices of other goods, producer expectations and number of sellers . Any change in the determinants of supply will result in a change the supply itself. If
A product is considered to be elastic if a change in its price leads to a difference in the quantity demanded or supplied. An inelastic product is one that does not witness a quantity change in its demand or supply with a price change. Further, elasticity differs with the type of products being sold because consumers may view some products as being more indispensable than others. For instance, appliances, motorhomes, and other luxuries demonstrate elasticity of demand due to the fact that the cost of buying the product has become too high; as opposed to food, personal hygiene products, and water which shows an inelasticity of demand because these goods are viewed as a necessity to a consumer’s daily life regardless of price. PART A 2.
This is unlikely to be the case in the UK at the moment as low interest rates and a large budget deficit has not cause significant inflation. A further conflict with loose demand side policies might the effect on the current account. With higher economic growth and consumption, we might expect an increase in the demand for imports and a worsening of the current account. This is likely to be a fairly significant effect for the UK because it has a high marginal propensity to import – especially for manufactured goods. Furthermore, if there is inflation from the demand side policies then there will be a fall in UK competitiveness and a
For example, if the prices levels are too high, manufacturers will hope to turn great profits and increase supply by making more products. However, these high prices mean consumers will want to buy less. On the other hand, if prices levels are too low, manufacturers will not want to make more goods. Consumers, however, will want to buy more at this low price, and a shortage may result. There are differences between shifts of demand/supply curves and movements along demand/supply curves.
It can be argued that this case of restructuring was largely caused by the external factors – mature and cyclical market characteristics. However, it must be remembered that Ford’s internal corporate inefficiencies also allowed its company to lag behind times such that when the hard times come, they are badly hit. A side argument can be used for the fluctuating exchange rates that negatively impacted operating profits in foreign or the domestic US market. The appreciation of the US dollar may make it less attractive for foreign markets to purchase vehicles from Ford as they would effectively be over-priced compared to its overseas counterparts (especially Japan). An increase in the price of raw materials against a depreciating US dollar will severely cause costs to become inflated leaving less room for profit margins.