Eco561 Research Paper

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Running head: INTERNATIONAL PAPER International Paper ECO561 / Economics International Paper Introduction Identify and Justify Macroeconomic Measures for Pricing and Output The economy is measured based on annual total output of goods and services and is called the gross domestic product or GDP. (McConnell, 112) Additionally the GDP shows what each sector or industry pays for the goods and services it receives. Based on data provided in the Bureau of Economic Analysis’ Industry Economic Accounts, we know that the gross output for the motor vehicle industry is significantly higher than Big Drive Auto’s output. ( There are several different factors that could impact why Big Drive is lower than the national average. These include potential differences such as the amount of local competition, the local economy, and possible higher unemployment rates all of which lead to less disposable personal income. Interestingly Big Drive sales continued…show more content…
Potential customers can range from the individual or business looking for a new vehicle to those that need to maintain what they currently own. Big Drive should focus on satisfying the needs of both potential customers in order to continue to be profitable. Individuals or businesses in the market for a new car may have more disposable personal income available so may be more likely to invest in something new rather than service their current vehicle. This allows Big Drive to increase their profits associated with sales of new vehicles. For those individuals with less opportunity to spend any personal income they may have, Big Drive needs to attract the potential customer for parts to their vehicle or for such services or products such as motor oil, coolant, or tires. By focusing on both the sales of new vehicles and the services and parts associated with current vehicles, Big Drive should continue to see

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